Budget 2021 | ‘Still need to see the fine print on the incentives of scrappage policy’

By Vinkesh Gulati

FADA is happy to note that Finance Minister Nirmala Sitharaman has finally announced the much awaited scrappage policy, though voluntary to phase out old vehicles.

If we take 1990 as base year, there are approximately 37L commercial vehicles and 52L passenger vehicles eligible for voluntarily scrappage.

As an estimate, 10 per cent of CV and 5 per cent of PV may still be plying on road. We still need to see the fine print to access the kind of incentives which will be on offer and thus have a positive effect on retail.

The 6,575 Km highway works proposed in Tamil Nadu, Kerala, West Bengal and Assam and another 19,500 Km work for the Bharat Mala project will definitely add fillip to much needed revival of commercial vehicles, especially in the medium and heavy commercial vehicle segment.

The Government’s reduction of customs duty on steel products to 7.5% will benefit Auto OEMs. We hence expect the benefit to trickle down to end customers thus helping in boosting of demand.

While we expected disposable income for individuals to increase with enhancement of IT slabs and depreciation benefit on vehicles for individuals, the same has not been taken into consideration.”

(The author is President, Federation of Automobile Dealers Association)