Government's V-VMP Policy might not cover fuel guzzlers

The Government's planned incentives to new car buyers for scrapping their old rides might not cover those who opt for models with an FE figure less than 13-14 kmpl. This information was provided by a senior official who is dealing with the Voluntary Vehicular Fleet Modernisation Policy (V-VMP).

This would mean that some of the larger sedans & SUVs available in the market won't be eligible for the V-VMP benefits. A final draft will be made after discussion with the stakeholders.

Under V-VMP, if an owner decides to scrap his old car and buy a new one, the Government will provide incentives at the time of purchase of the new car. Under its current structure, V-VMP will provide incentives to only those who scrap vehicles bought before April 2005, or vehicles which aren't EURO IV compliant. The Government estimates that this new step would help eliminate around 28 million polluting vehicles from the road.

The V-VMP policy proposes that the owner is given three incentives when buying a new car after scrapping an old one. These include half of the excise duty on the new car being waived off, fair value of the scrap and manufacturer discounts. Cumulatively, the incentives could reduce the cost of a new vehicle by around 15 percent.

Source: ET Auto