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Govt depts to replace old cars to boost demand for industry: Nirmala Sitharaman

The government will lift a ban that forbade government departments from buying new vehicles, even to replace old ones, finance minister Nirmala Sitharaman said Friday, as she announced a slew of measures to boost demand for the auto sector.

The auto sector has been battling a severe downturn, thanks primarily to a drop in demand and to confusion over some upcoming regulations.

Speaking at a press conference in New Delhi, finance minister Nirmala Sitharaman said that the Bharat Stage IV vehicles purchased before March 2020 will remain operational for the full period of their registration. Sitharaman said she wanted to dismiss speculation that BS-IV vehicles would become illegal to drive after 2020 when BS-VI norms will kick in.

(The Bharat stage Emission Standards are emission norms that define the quantity of pollutants a vehicle is legally allowed to emit. The BS-VI norms are stricter than BS-IV norms.)

Nirmala Sitharaman also said that in order to boost demand in the auto sector, the government was putting off a proposal to increase registration fees of vehicles.

The other major announcement the finance minister made with regards to boosting demand was to do with a ban on buying vehicles imposed on government departments. The ban did not allow departments to buy new vehicles even if it was to replace old ones.

Now, Nirmala Sitharaman said, government departments will be actively pushed to replace old vehicles and provide a source of demand for the auto sector.




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