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The Indian government's new PM E-Drive scheme, designed to incentivize the adoption of electric trucks, has introduced a unique requirement: buyers must possess a Certificate of Deposit (CD) obtained after scrapping an old vehicle to qualify for the subsidy. This policy aims to promote the government's vehicle scrapping initiative, which has struggled to gain traction since its introduction in 2022. The minister of heavy industries, HD Kumaraswamy, has clarified that while a scrapping certificate is mandatory for availing the subsidy, first-time truck buyers can acquire one from someone else, as the certificate is considered tradable. This provision allows individuals without previous truck ownership to access the incentives.
The scrapping mandate serves a dual purpose. It seeks to reduce the number of aging, polluting vehicles on Indian roads by encouraging their replacement with newer, more efficient models. The government believes that this initiative will contribute significantly to reducing carbon emissions, a pressing concern in India. Additionally, the policy aims to boost the domestic automotive market by stimulating demand for new vehicles. The government has already initiated efforts to encourage OEMs to offer discounts to consumers who purchase new vehicles after scrapping their old ones.
While the government's objective to promote electric vehicles and reduce pollution is commendable, the scrapping requirement might face challenges in its implementation. Critics argue that the requirement could impose a significant financial burden on potential buyers, particularly those who cannot afford to purchase a new truck and a scrapping certificate simultaneously. Furthermore, the availability of sufficient scrapping facilities and the smooth functioning of the certificate trading system are crucial for the policy's success. It remains to be seen whether the scrapping mandate will achieve its intended goals or create unintended barriers to the adoption of electric trucks in India.
Source: PM E-Drive subsidy for e-trucks only for those with scrapping certificate