|
Keeping in mind the socio-economic and political implications that the scheme may have, it should focus on incentives rather than simple mandates. In the present Indian scenario it seems more feasible to encourage people to replace their old vehicles with new ones, than simply forcing old vehicles off the road.
One of the ways to achieve market acceptance could be to propose a scheme as follows:
Year 1 : Offer full incentives and at the same time declare that in the 2nd year the quantum of incentives will
be halved. Also, declare that at the end of 2nd year, vehicle retirement will be mandated.
Year 2 : Offer 50% incentives.
Year 3 : Mandate retirement without any incentives.The proposed scheme requires support from both the State Government and the Central Government.They would need to come together to make this programme successful by providing fiscal incentives for fleet modernisation. Project Modernfleet suggests a fixed percentage (50%) rebate in Excise and Sales Tax for different type of vehicles.
Moreover, in order to discourage people from running old polluting vehicles, the following steps could be considered for implementation:
- The rate of road tax should be linked to the age of the vehicle – the older the vehicle the higher the tax.
- Similarly, the rate of premium on motor vehicle insurance could be increased progressively with the age of the vehicle.
The following analysis has been done on the basis of an across the board 50% concession in Excise Duty and Sales Tax, as an incentive.
|
