Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do.

There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Thursday, 22 September 2016

From OLD to NEW ? No , go NEWER !

Economic Times ( 19 Sept 2016 ) carries following news report :

GST comes in way of government’s plan to scrap old vehicles 

" The government's ambitious programme to get old, polluting vehicles off the road has hit an unexpected speed bump: Goods and Services Tax. 

The Voluntary Vehicle Fleet Modernisation Programme ( V-VMP ) is back on the drawing board as the government reviews its options to reward those who agree to junk their old vehicles to buy new, less polluting, ones. 

The earlier plan was to levy lower excise tax on new vehicles bought under V-VMP. 

But the new tax system that is expected take effect next fiscal year will amalgamate excise tax into the overarching indirect tax called GST. The finance ministry doesn't favour giving incentives under GST and has directed the roads transport ministry to examine other methods to encourage people to scrap old vehicles. 

The draft policy currently proposes slashing excise duty by half on the purchase of a new vehicle after scrapping an old one, fair value for the scrap and special discounts from automobile manufacturers.

The incentives are expected to reduce the cost of a new vehicle for the buyer by 8-12%.

Further, to encourage commuters to shift to new and high capacity buses, which will help decongest roads, the policy also recommends complete excise exemption for state transport buses. "


Simply replacing OLD petrol / diesel vehicles with NEW petrol / diesel vehicles is a half-way house !

No one understands this better than our " Minister-in-a-Hurry " , Shri Gadkariji , who does not believe in the theory of " Evolving through Incremental Improvements "

That is the reason he mandated the vehicle manufacturers to jump straight from current BHARAT 4 emission norms to BHARAT 6 emission norms , ( bypassing BHARAT 5 norms ), by 2020  !

He knows how 800 million poor Indian Citizens who had never owned a landline telephone , simply bypassed it with a cheap mobile , to usher a Communication Revolution in India !

But even he cannot persuade the just constituted GST Council ( which will hold its very first meeting today ) , to reduce GST rate for new vehicles . That would open up a " Pandora's Box "

But surely he can convince his Cabinet Colleagues ,

*  The  FUTILITY  of just replacing OLD with the NEW ( petrol or diesel )

*  The  DESIRABILITY  to move straight from OLD ( petrol / diesel ) to NEWER ( electric vehicles )

Here is how this can happen ( - and without having to reduce GST on the new electric vehicles ! ) :

Abolish  CORPORATE  INCOME  TAX  for next 10 years for the following manufacturers / service providers ,

#  Manufacturers of Electric Vehicles and Manufacturers of " Special Purpose Components " thereof

#  Manufacturers of equipment needed for charging of electric vehicles

#  Companies  owning and operating Electric Charging Stations

#  Companies manufacturing Solar Power Generation Equipment

#  Electric Utility Companies owning / operating Solar Power Generation Stations

    ( Surely , we don't want to simply transfer the pollution from cars to fossil fuel power plants ! )

#  Any other manufacturer / service provider who helps to accelerate this revolution

Now , with this " INCENTIVE " , imagine the kind of " FIERCE COMPETITION " among the vehicle manufacturers to quickly switch-over from petrol / diesel to  ELECTRIC VEHICLES  , in order to survive !

Expect a MAD RACE  to switch over - a race in which selling prices of electric vehicles gets 10 % lesser than equivalent petrol / diesel version  !

No need to " incentivize / reward " the buyers with a reduced GST , for scrapping their old polluting vehicles  !

Just harness the combined power of  Corporate  GREED with INSTINCT  FOR  SURVIVAL  !

Entire World would want to copy the  MIRACLE  that gets unleashed in India

I hope Shri Gadkariji will give my suggestion , a serious consideration


22  Sept  2016

www.hemenparekh.in / blogs