'Cash for Clunkers' policy soon

New Delhi/Mumbai: A desi version of 'Cash for Clunkers' scheme might be in the offing to reverse the slowdown that has heavily dented the Indian automobile industry.

Accordingly, several central government ministries are said to be in a huddle to finalise key aspects of the policy such as incentives for buying new vehicles in lieu of scrapping old ones along with deciding the parameters of eligible category of automobiles.

Even state governments are being approached to take their inputs regarding land use incentives for setting-up of vehicle scrap yards.

The development comes as the automobile industry has repeatedly sought an 'End of Life' policy from the central government as a measure to arrest the falling sales.

The policy, if implemented, is expected to encourage customers to go in for new purchases which will be backed-up by government incentives in lieu of their old vehicles.

Significantly, the move is considered to be the most vital element of any further package to prop-up the sector's growth.

In July, the Ministry of Road Transport and Highways had issued draft amendment of the Central Motor Vehicle rules for public consultation which, among other things, proposed to provide benefits ranging up to Rs 40,000 on new purchases after scrappage of the old vehicle of a similar category.

The proposal also included waving-off registration fees for new vehicle, if the customer is able to produce a scrappage certificate for a vehicle of the same category.