With a view to combating deteriorating air quality, stringent environmental regulations are being mooted. The automobile industry in India has been meeting these challenges. In recent years, the industry has made significant investment to produce safer and increasingly environment friendly vehicles. It is striving to catch up with the European emission norms. In fact in the two wheeler segment, new Indian vehicles already meet one of the most stringent emission standards in the world.

However, whilst the new vehicles are cleaner and meeting stringent emission requirements, the benefits are not reflected in the ambient air quality due to the presence of a large number of old and ill maintained polluting vehicles.

In light of the above, fleet renewal programme appears to be an effective measure to combat the problem of vehicular pollution in the near term. Therefore, the recommended course for India would be for the Government to notify a retirement scheme to be operated through a single window. It would help in removing older, potentially polluting and unsafe vehicles from the road. The replacement of these older vehicles would also have an additional favourable impact on the economy: this project would generate additional demand for new vehicles and make the scheme potentially revenue positive, if not, at least, revenue neutral from the Government’s point of view.

Also, the country would benefit by way of reduction in expenditure on account of fuel saving by retiring old vehicles and replacing them with more new ones, which are more fuel efficient.

Most importantly, the reduction in pollution would lead to substantial health benefits and the resultant reduction in cost of medical treatment, reduction in premature deaths, reduction in man days lost on account of illness and so on.

Given the profile of vehicle population in India, the suggested scheme would offer an effective solution to the problem to vehicular pollution faced by India and it would be apt to focus the first phase in the seven principal cities namely Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad and Ahmedabad. This should be treated as a model and extended gradually to all other cities across India over a 3 to 5 year timeframe.

An age based fleet modernisation programme appears to be an effective option tackle the problem of emission from in-use vehicles on a one-time basis.

The fleet modernisation programme should encompass all vehicles, both private and vehicles for commercial use. While a cut-off point of 10 year vintage could be considered for commercial vehicles, it may be appropriate to fix the cut-off point of private vehicles at 15 years or above vintage. This suggestion is based on the assumption that maintenance practice of private vehicles are likely to be better while their usage is likely to be lower than commercial vehicles.

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 total number of more than 10 year old vehicles for commercial use and more than 15 year old vehicles for private use in the seven cities are given in the table below: