Govt should make provisions for 'financial incentives' in the Scrappage Policy: Parliamentary Committee

The committee suggests in addition to setting the Automotive Vehicles Scrapping Facility centres across the country, the govt should make provisions for upfront financial incentives in the Scrappage Policy to boost demand for purchase of new vehicles.

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To boost demand for the purchase of new vehicles, the Department-Related Parliamentary Standing Committee on Industries in its 313th report suggested the government, make provisions for "upfront financial incentives” in the Scrappage Policy. 

The committee consisting of 10 Members of Parliament from Rajya Sabha and 21 from the Lok Sabha as well as six members of Parliament Secretariat under the chairmanship of Telangana Rashtra Samithi leader and members of the Upper House Dr. K Keshav Rao made the recommendations and observations in its recent report on "Downturn in Automobile Sector.”

Taking cognizance of the revival on Heavy Industries, the Committee presented its 313th report on action taken by the Ministry of Heavy Industries on the recommendations and observations contained in the committee’s 303rd report presented before the Rajya Sabha and the Lok Sabha on February 3 last year. 

The Ministry of Heavy Industries furnished the action on the 303rd report of the committee on November 22, last year. The committee considered the draft report and adopted the same as its meeting was held on February 3 this year. "The committee is of the view that in addition to the setting of Automotive Vehicles Scrapping Facility (AVSF) centres across the country, the government should make provisions for upfront financial incentives in the Scrappage Policy to boost demand for purchase of new vehicles," the committee recommended.

The proposed financial incentives would encourage end-users to discard their old and polluting vehicles and go in for the purchase of the new BS-VI compliant vehicles, the committee observed in the report. Further, the committee also recommended that "adequate transparency should be maintained while selecting the proposed AVSF centre, which should be based on adherence to pre-decided parameters that have to be met by such centres." 

In its steps to phase out old and unfit vehicles, the Ministry of Road Transport and Highways, however, on March 15 last year issued a notification under provisions of Motor Vehicles (Registration and Functions of Vehicles Scrapping Facility) Rules, 2021 for the establishment of Registered Vehicles Scrapping Facility (RVSF) to ensure transparency in the selection of RVSF, says the report in action taken replies header. 

The draft notification issued on March 12 last year provides that certificate of registration of government-owned vehicles would be non-renewable on the lapse of 15 years while draft notification on March 15 last year provides for revision of registration fee, fitness testing fees, and a fitness certification fee of vehicles and the initiative is towards the creation of an ecosystem for phasing out of older polluting vehicles, the report mentions. Besides, the report points the draft notification dated March 26 last year provides for concession in the motor vehicle tax for vehicles registered against submission of "Certificate of vehicle scrapping."

As well, the report states, that the draft notification dated April 8 last year provides for "recognition, regulation, and control of Automated Testing Stations".All these initiatives, the report says, are to "ensure transparency in the vehicle scrapping process".Later, the committee recommended that the core objective of the Automotive Mission Plan (2026) is to propel the Indian Automobile Industry to be the engine of the "Make in India" program as it is among the foremost drives of the manufacturing sector.

In this regard, the committee was informed by the Federation of Automobile Dealers Association (FADA) that if Foreign Direct Investment is allowed in the auto sector, it will allow Indian Auto Dealers to expand by attracting foreign investment and collaborating with dealership groups internationally, without compromising their ownership. 

With inputs from ANI