The proposed vehicle scrappage policy by Government of India, targets to help replace old, polluting and fuel-guzzling vehicles with new efficient ones. However, this is unlikely to drive demand significantly, says rating agency Crisil. The policy, which obtained green signal from the Prime Minister's Office, awaits approval from the Goods and Services Tax (GST) Council. Two important changes made to the Ministry of Road Transport and Highways' previous draft note, will limit the need for replacement, says Crisil. They are, a change in the age of the vehicles from 15 years to 20 years and date of policy implementation from 1 Apr 2020, matching with the implementation of BS-VI
norms. Very few commercial vehicles will be over 20 years of age, said the report.
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