Taxing older vehicles – UPSC GS3

  • The Centre has planned a policy to raise road tax on vehicles of a certain age from April 1 next year.
  • This has the potential to renew a big part of India’s vehicles on the road, raising fuel efficiency, and improving safety standards.
  • Commercial transport vehicles will have to pay 10%-25% extra on road tax after 8 years while renewing the fitness certificate. While for personal vehicles it will be implemented after 15 years.
  • Public transports are given concessions.
  • While hybrids, electrics, and farm vehicles have been exempted.
  • Higher tax on diesel engines and in most polluted cities is also proposed.
What is needed to make this a success?
  • Additional tax should be greater than the resale value of old vehicle to ensure that it is discarded.
  • Safe disposal and recycling.
  • Discount to marginal operators like auto-rickshaw drivers as was done in 2009 in JNNRUM scheme for buses.
  • Recovery of steel, Aluminium and plastic and recycling it.
  • Organising scrap collection and recycling industry.
  • Updating vehicle registration databases for all states to show actual numbers of old vehicles.
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