Limited incentives makes scrappage policy unattractive for trucks
ECONOMY & POLICY

Limited incentives makes scrappage policy unattractive for trucks

Owing to limited incentives and poor cost economics for trucks in the Vehicle Scrappage Policy, combined with lack of addressable volumes for other segments, owners of old trucks might not find it financially viable to scrap their old vehicle and invest in a new one.

Freight transporters are unlikely to replace their old vehicles with new ones as a part of the scrappage policy due to limited incentives.

Though the scrappage volume of photovoltaics (PVs), buses, and two-wheelers are expected to be limited as well, the policy’s impact on new commercial vehicle sales could be sizeable based on addressable volume, Credit Rating Information Services of India Ltd (CRISIL) said in its report.

The policy proposes to deregister vehicles that fail fitness tests or are unable to renew registrations after 15 to 20 years of use.

According to CRISIL, several buses owned by state transport undertakings will have a life of over 15 years. Compared to this, buses operated for intercity, staff, school and tourist segments typically do not have a life beyond 15 years and would thus be outside the scope of the scrappage policy.

Regarding passenger vehicles, renewal of registration fees is proposed to be jacked up from Rs 600 to Rs 5,000 (valid for five years) for PVs older than 15 years, which is a surge of more than eight times.

The potential benefit from scrapping a 15-year-old, entry-level small car will be Rs 70,000, whereas its resale value is around Rs 95,000. According to the CRISIL report, this makes the scrappage policy unattractive.

Image Source


Also Read:  Govt makes new announcements on vehicle scrappage policy

Also Read: Commercial vehicles may go first in scrappage rollout

Owing to limited incentives and poor cost economics for trucks in the Vehicle Scrappage Policy, combined with lack of addressable volumes for other segments, owners of old trucks might not find it financially viable to scrap their old vehicle and invest in a new one. Freight transporters are unlikely to replace their old vehicles with new ones as a part of the scrappage policy due to limited incentives. Though the scrappage volume of photovoltaics (PVs), buses, and two-wheelers are expected to be limited as well, the policy’s impact on new commercial vehicle sales could be sizeable based on addressable volume, Credit Rating Information Services of India Ltd (CRISIL) said in its report. The policy proposes to deregister vehicles that fail fitness tests or are unable to renew registrations after 15 to 20 years of use. According to CRISIL, several buses owned by state transport undertakings will have a life of over 15 years. Compared to this, buses operated for intercity, staff, school and tourist segments typically do not have a life beyond 15 years and would thus be outside the scope of the scrappage policy. Regarding passenger vehicles, renewal of registration fees is proposed to be jacked up from Rs 600 to Rs 5,000 (valid for five years) for PVs older than 15 years, which is a surge of more than eight times. The potential benefit from scrapping a 15-year-old, entry-level small car will be Rs 70,000, whereas its resale value is around Rs 95,000. According to the CRISIL report, this makes the scrappage policy unattractive. Image Source Also Read:  Govt makes new announcements on vehicle scrappage policy Also Read: Commercial vehicles may go first in scrappage rollout

Next Story
Infrastructure Transport

Metro Line 2B Phase 1 to Boost Realty in Mumbai’s Eastern Suburbs

Mumbai’s real estate sector is set for a major boost as Phase 1 of Metro Line 2B, between Mandale and Diamond Garden, nears completion. The Mumbai Metropolitan Region Development Authority (MMRDA) has confirmed that mandatory rectifications are done, and inspections by the Commissioner of Metro Railway Safety (CMRS) have been carried out. The 5.39-km stretch with five stations forms part of the larger DN Nagar–Mandale corridor, designed to ease congestion and improve east–west connectivity. Passenger operations are expected by December 2025, with the full line slated for 2027. ..

Next Story
Resources

WattPower wins Best Inverter award at Global Solar Expo 2025

WattPower, a leading renewable energy solutions provider, has won the award for “Best Inverter in the Utility Segment” at the Global Solar Expo 2025. The recognition underscores the company’s commitment to delivering reliable, high-performance and future-ready solar solutions for large-scale projects. At the forefront of utility-scale solar, WattPower manufactures advanced string inverters that directly feed power into the Indian grid. With robust technology, high-quality components and comprehensive product lifecycle support, its solutions stand among the most sophisticated in the ..

Next Story
Real Estate

Awfis delivers 67,000 sq. ft. innovation hub for eBay in Bengaluru

Awfis Space Solutions, India’s largest flexible workspace provider and the first publicly listed workspace solutions platform, has partnered with eBay to establish a 67,000 sq. ft. innovation hub at Embassy Tech Village, Bengaluru. The mandate covers design, build and management of the new office, which will act as a strategic hub supporting diverse functions and accelerating eBay’s AI-first commerce strategy. The centre will focus on artificial intelligence, engineering, product development and applied research, strengthening eBay’s growth in India. Embassy Tech Village, North Beng..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?