Retiring Old Vehicles - Gadkari
Style ?
Here
is how , Road Transport Ministry proposes to remove from the roads, some 28
million vehicles which are 10 year old :
INCENTIVES TO VEHICLE OWNERS :
#
Fair value for the vehicle to be scrapped ( needs to be defined precisely )
#
Rebate of 50 % of Excise on purchase of New Vehicle ( BS IV compliant )
#
Discounts by Auto Manufacturers ( How much ? Who picks up the tab ? )
All
of these combined will reduce the cost to buyer by 8 % - 10 %
PROCEDURE :
#
Owner to deposit old vehicle documents at Recycling / Shredding Center
#
After verification , Owner gets a Certificate and scrap value of the vehicle
#
Owner submits Certificate to Dealer while buying new vehicle to get
discount
BENEFITS EXPECTED :
#
Reduce vehicular emission by 25%-30%
#
Save 3.2 billion litres of oil , every year
#
Save Rs 7000 Crore in oil imports , every year
While welcoming this initiative , I request Shri Nitin Gadkariji
, to ponder the issues raised in my following earlier blog , when Shri Piyush
Goyal had made a similar proposal , sometime back
Surely , no one - least of all , the car owners - would want to
get caught between two , very ambitious , but contradictory plans !
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After second world war , European
economy was in shambles / devastated
It was revived through
America's generous help in the form of Marshal Plan
A couple of days back, Shri Piyush Goyal announced intention to
replace India's current petrol / diesel vehicles with Electric vehicles , by 2030
Now , consider this :
* India
boasts of 200 million vehicles today
* We add
some 10 million new vehicles each year
* Today , global
electric vehicles number only 6.65 lakhs
* World may reach
30 million electric vehicles by 2030
In light of this , is "
PIYUSH PLAN " feasible ?
Let us take up the associated
issues , one by one , and explore possible solutions
# TIME FRAME for CHANGE-OVER
Replacing 13.3 million vehicles
per year ( starting TO-DAY ! ) to fully change-over 200 million vehicles in 15
years , is NOT possible
Remember , some 10 million
vehicles get added each year for replacement / new demand
Way Out :
* Existing vehicle
manufacturers to COMMENCE production of electric vehicles by 2020 , giving them
5 years lead time to tool up
* Manufacturers to
start TAPERING OFF production of petrol / diesel vehicles from 2020 at the rate
of 10 % per year. In 10 years ( by 2030 ) , they must stop all old vehicle
production
* Simultaneously ,
manufacturers to step up electric vehicle production by 10 % per year , so as
to achieve 100 % electric vehicle production by 2030
* This time frame will
also apply to auto components / ancillary manufacturers ( Batteries etc )
* Complete elimination
of petrol / diesel vehicles from the roads to be targeted by 2050
# DISPOSAL OF EXISTING VEHICLES
( 200 million + produced till 2030 )
* Enable / encourage
MSME units to carry out " Retro Fitting
" of existing vehicles
* Vehicles older than
15 years to be taken off the roads . Encourage MSME to salvage whatever they
can from such vehicles ( eg : Steel )
* Provide special
incentives to export such " Pre-Used / Reconditioned " to less developed
countries
# CHARGING STATIONS
* Existing
petrol / diesel filling stations will need to be converted to Electric Charging
Stations
* These
Charging Stations , themselves , must NOT draw electric power from State /
National Power Grids - power which comes from Power Stations using FOSSIL
FUEL !
That would
only transfer the pollution creation from vehicle engines to fossil-fueled
power stations !
My Suggestion :
Use bicycle powered
electricity generating device , innovated by Manoj Bhargava (
BillionsinChange )
This pedal operated device
generates / stores , with just ONE HOUR of pedaling, enough power to light up
12 lamps of 100 W each for 24 hours , and costs around Rs 10,000/-
Some 25 of such devices are
right now under installation in north India
Its construction is so simple
that any MSME in smallest town can fabricate it easily , making it possible to
get 10 million of these devices manufactured within a year
I am sure , Manoj Bhargava
would be more than happy to release its manufacturing drawings on his web site
for anyone to register and then download for FREE !
Do we foresee 50 / 60 million
unemployed youth to become self-employed by setting up their own mini Charging
Stations , on every street corner of every town in India ?
No dependence on Fossil or
Solar , yet pure GREEN power around the clock !
Who knows , some owners of
electric cars may even install one in their garage to serve dual purpose (
improve health + charge the car ). No doubt , a higher capacity version !
And , may be all GYMS around
the country will install one !
Some 32 years ago , India
witnessed a Telecom Revolution , riding on the wheels of a million roadside PCOs
and a million Cyber Cafes
Piyushji :
Enabling launch of a million
street-corner Charging Stations has got to be your
TRYST WITH
DESTINY
# FINANCING
Shri Goyal said
:
" We don't need one
rupee support from the government
We don't need one rupee
investment from the people of India "
But Vehicle
Manufacturers say :
" We cannot give
away electric cars for FREE ! We need money to run our operations and in
advance . At the most , we can consider some sort of " Hire Purchase
" scheme , if we can get funds at an interest rate of 5 % and are allowed
to charge the buyers , 10 % "
And Banks say :
" We have already
advanced car-loans totaling thousands of crores . If we are allowed to transfer
the unpaid balances along with the fresh loan amounts , to a "
Restructured Loan " bearing a higher interest rate ( and EMI ) , then we
can consider "
Government says
:
" We don't have funds to
build more roads . So, where is the question of financing private purchase /
usage of cars ? We would rather build more / better ( concrete ) roads "
Individual says
:
" I can hardly
make ends meet ! If I must borrow from anyone , I would rather buy a roof over
my head . I am already paying huge EMIs for my current car "
I say :
* No questions asked
for any CASH deposited into a person's Jan Dhan Bank account
* Create a SPV called ,
EVFF ( Electric Vehicle Finance Fund )
* Public can invest in
this fund but only from their Jan Dhan Bank Accounts deposits
* Interest earned from
EVFF to be totally free from personal Income Tax for 10 years
* EVFF will finance Car
Loan companies or " Hire Purchase Schemes " of car manufacturers
* Car finance companies
will be asked to stop financing of petrol / diesel cars and finance
only
electric vehicles
If this is implemented ,
within 6 months , EVFF will be able to create a Corpus of Rs 10 lakh*crores !
Can you think of a better way
of harnessing BLACK money to finance a GREEN future ?
# INCENTIVE FOR CAR MANUFACTURERS
AND CAR OWNERS
Shri Goyal says :
" We are trying to make
this program self financing by monetizing the savings people have from using
cheaper electricity to run cars
We are trying to work out
whether we can give the cars for free initially and people can pay back out of
the savings from not using petroleum products "
Figuring out which electric
car owner saved how much money by not using petrol / diesel vehicle is a very
messy issue , to say the least !
People use , from a 5 HP scooter
to a 200 HP gas-guzzler car
Some use it for 500 KM per
month , whereas others use for 10,000 KM per month
They may use it for self /
family or for commercial purpose ( Rickshaw / Taxi / Bus / Truck )
They may use diesel or petrol
( even mixed with kerosene in case of rickshaws )
For 200 million existing
vehicles , there could well be , 200 million different / unique ,
* Current amounts (
liters ) monthly fuel usage
* Purchased at
differing prices per litter ( depending upon city )
* Amounts paid to
Charging Stations ( bound to vary , even within a city )
* All of these leading
to different amount of monthly savings
* All the while
neglecting the monthly EMI costs incurred !
I am afraid any attempt to
compute " Individual Savings " is bound to raise controversies and
litigation of unimaginable scale !
And let us not forget that ,
when vehicle manufacturers switch-over to production of electric vehicles , it
won't be just ONE / STANDARD model of same horsepower
There will be hundreds of
models of electric vehicles of different designs / capacities /
specifications and consuming different amounts of electric power !
My
suggestion :
Forget about ,
* Computing of
" Individual Savings "
* Giving electric
cars " free initially "
* Owners "
paying back from savings "
Based on car specifications /
assumed average monthly usage etc , figure out and fix
* " Carbon Credits
" for each model of electric car manufactured
* Based on Carbon
Credits earned , calculate Direct Transfer of Benefit ( DTB ) to electric
car
manufacturers based on monthly dispatches of each model
and then transfer these
amounts from EVFF , as incentives to manufacturers
As far as incentives to electric
car owners is concerned , make tax-exempt , all interest paid by owners for car
loans taken , without any ceiling
# GENERAL / GLOBAL INCENTIVES
This game-changing initiative
has at its root ,
" SAVE
THE WORLD FROM POLLUTION "
This would require "
Pulling out all stops " , in the form of unprecedented " Incentives
" to :
* Individual
Electric Vehicle Owners
* Electric
Vehicle Manufacturers ( and " Disincentives " to petrol/diesel
manufacturers )
* Manufacturers of
Charging Station Equipment ( Bicycle based Devices , for sure )
* Charging
Station Operators
* Old Vehicle
Retrofitting Units ( MSME )
* Old Vehicle
recycling Units ( MSME )
* Old Vehicle
Exporting Units
* Roadside
Vehicle Repairers
* Vehicle
Purchase Finance Companies ( Car loans / Hire Purchase )
* Electric
Vehicle Leasing Companies
* Auto
Ancillaries of Electric Vehicles
* Distributors /
Dealers / Stockists of Electric Vehicles
* Transport
Companies using Electric Vehicles ( transporting people or goods )....etc
ALL of these ( and those that
I missed out ), must be EXEMPTED from :
* Indirect Taxes
( Excise / Octroi / Import Duty / Sales Tax / GST / Road Taxes etc )
* Direct Taxes ( Personal
and Corporate Income Tax / LTCG )
They must also be freed from
rigid licensing / registration / incorporation requirements
Dear Piyushji :
Newspaper reports quoted you
:
" We are thinking of
leading the World rather than following the World
India will be the
first country to think of that scale "
There is no doubt you can
lead the World , if you do not allow yourself to get paralyzed with the fear of
failure !
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31 May 2016
www.hemenparekh.in / blogs
