Tata Motors and Ashok Leyland pitch for a well-defined and financial incentives-based scrappage policy that can help create demand in the commercial vehicles (CV) segment.
A vehicle scrappage policy is in the works for some time now. The policy aims to put a cap on the life of vehicles in terms of years’ run. A well-defined and effective scrappage policy is one of the key imperatives for driving demand of cleaner BS-VI vehicles and more appropriately so, in the current shrinking demand across end-use sectors.
Replacement demand will remain the key driver for the sale of new vehicles, and the policy needs to have a clear definition of end-of-life vehicles (ELVs) and inclusion of financial incentives.
A scrappage scheme with incentives in the form of a rebate in GST, road tax or registration charges will help give demand a boost. Incentivised scrappage policy will encourage decamping of old and polluting vehicles which is an urgent need of the hour. Union Minister Nitin Gadkari had earlier in 2020 reiterated that scrappage policy was in final stages of getting the Cabinet approval.