Sops Sought For Old Fleet Operators

The Supreme Court's directive to ban all commercial vehicles over 15 years old from plying on Delhi roads should be followed up by "some economic sops" to fleet operators who scrap their old vehicles, according to Ashok Leyland's managing director R Seshasayee.

"In Italy, a special cash subsidy given by the government to operators who scrap their old trucks has proved to be very successful,'' he said.

Another innovative proposal that Seshasayee has mooted is granting 100 per cent depreciation on trucks. "Such a move will certainly catalyse demand and the government will not lose much. What it loses by way of income tax, it can make up from the higher excise earnings,'' he said.

 

The Association of Indian Automobile Manufacturers (AIAM), it may be recalled, was lobbying for some excise rebates for operators who buy new trucks after scrapping their old vehicles.

Though no exact estimates are available, the Supreme Court directive is expected to create some fresh demand.

Initially, all vehicles more than 15 years old will have to be replaced.

Secondly, the directive will virtually wipe out the resale value of very old vehicles in the second-hand market. This will force fleet operators to replace their vehicles earlier, creating some demand.

"The judgment applies only to Delhi. But a start has been made and other cities like Mumbai, Ahmedabad and Bangalore will soon follow suit,'' Ashok Leyland's executive director, marketing, Amol J Sandil said.

"The directive is most appropriate for the environment. While there are adequate laws on emission control for new vehicles, the emission for in-use vehicles should also be kept in check,'' Seshasayee added.

The commercial vehicle industry is currently witnessing its worst recession ever. Sales are dropping by well over 30 per cent for the second consecutive year.