Maruti Suzuki’s R.C. Bhargava has stated that there is no need to incentivise scrapping if a vehicle is deemed to be unfit
Union Minister of Road Transport and Highways, Nitin Gadkari, recently announced the vehicle scrapping policy. As per the new policy, there are a few incentives on offer for people who scrap their old vehicles, including road tax rebate and registration fee waiver on the purchase of a new one following the scrapping.
The policy also advises carmakers to offer a 5 per cent discount to customers against the scrapping certificate, to further incentivise it. However, R.C. Bhargava, Chairman of Maruti Suzuki India Ltd., stated in an interview with ET Now that the discounts and other benefits shouldn’t be offered to vehicles that are deemed unfit and in need of scrapping as per the policy.
Speaking on the scrappage policy, Bhargava said: “If people were scrapping vehicles while they were still fit, and it was done to bolster demand like it happened in many countries in the past – that for a temporary period, the government gave incentives for vehicles to be scrapped – that I understand. But when an unfit vehicle is scrapped, why should the customer get any incentive for scrapping it?”
According to Bhargava, the policy does well to recognise the fact that a lot of vehicles on Indian roads aren’t maintained properly, which potentially compromises road safety and is damaging to the environment as well. Thus, he says, fitness tests shouldn’t be limited to after 15 or 20 years of purchase, but should be more frequent.
He also stated that the 5 per cent discount for buyers against the scrapping certificate has yet only been advised to automakers. He further stated that the mandatory fitness testing for all vehicles categories (except heavy commercial vehicles) won’t begin until 2024. Until then, plenty of discussions are expected to happen.
It should also be noted that although the vehicle scrappage policy offers incentives for scrapping old vehicles, it is also rather strict. Vehicles that fail the fitness test will automatically be de-registered, along with vehicles that don’t get fitness checks on time. Also, the charges for renewing the RC will be much higher, and an additional green tax has also been proposed for old vehicles.