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​INR 16000 Crores: The Cost of Taking Old Trucks off Indian Roads

Published On Dec 13, 2016By Mukul Yudhveer Singh

The Government of India's ambitious GST bill might cost a whopping INR 16000 crores in lieu of taking the old polluting trucks and other vehciles off Indian roads. Taking old polluting vehicles off road has been projected under Voluntary Vehicle Modernisation Programme.

The guidelines, before taking the new GST bill in consideration, had included various incentives and rebates for truck owners upgrading to new trucks. But with the new excise frame, the government may have to spend a sum of INR 50,000-60,000 or more in lieu of every heavy truck.

The original Voluntary Vehicle Modernisation Programme framework had also proposed a straight half cut in the excise duty, to be provided, in case of scrapping of old truck by the owner. The current policy, however, makes trucks which are not BS-IV compliant or those bought before March 31, 2005 eligible for new, yet to be finalized incentives and rebates.

This new proposal is still awaiting approval from committees of secretaries from various ministries including roads, finance and environment ministries. It is estimated that the new proposal on finalisation may effect more than 20 lakh old trucks being driven in the country.

Heavy vehicles only form a very little share of the total trucks plying in the country, but consume more than 60 percent of the total fuel consumed. It is also estimated that these are also responsible of more than 60 percent of the total pollution caused by vehicles on the road.

The scrapping of old vehicles, may also help the government, with a steel scrap worth INR 11,500 crore every year.

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