A vehicle scrappage policy that looks only at the automobile sector for its impact is not particularly useful.
An automobile scrappage policy is welcome, in theory, as part of creating a circular economy that recycles as much as possible of anything and everything. Imaginative scrapping would boost resource efficiency, abate pollution levels and gainfully step up demand in the bargain. However, a vehicle scrappage policy that looks only at the automobile sector for its impact is not particularly useful. And for a scrappage policy to be effective, the policy and tariffs on scrap have to be rationalised as well. It makes sense to align the import duty on scrap with the import duty on steel. That would incentivise an organised domestic scrap industry.
In a capital-scarce economy like ours, we surely need to rethink mechanical ‘end-of-life’ scrapping of older vehicles. It is entirely possible that those vehicles that fail to pass stringent pollution norms set for dense urban centres are quite okay for plying in India’s vast hinterland. And, seen in this context, any premature scrapping would be at considerable, much avoidable, national cost. The nationwide distribution of better qualify automotive fuel does quite a lot to reduce pollution levels. As for reducing greenhouse gas (GHG) emissions, the policy’s advocacy of huge tax incentives and price discounts for private cars, in the case of owners who have scrapped their previous vehicles, is at odds with the need to promote efficient public transport, preferably running on green fuels. The policy calls for ‘fitness test’ at certified fitness centres for private and commercial vehicles that are, respectively, more than 20 and 15 years old. And failure to garner a fitness certificate would lead to automatic cancellation of vehicle registration.
Older vehicles tend to be more polluting, true. But better maintenance and regular engine tuning does bring down tailpipe emissions, and, anyway, vehicles not meeting fitness norms for towns could still do useful work in rural areas. The capacity to inspect vehicles for compliance with pollution norms for their vintage is more relevant than blanket scrapping.