Fleet Modernization: A solution to achieve better air quality
India's transport demand has grown from a total of 5.3 million in 1981 to 230 million in 2016, with two-wheelers and cars having 73% and 14% share, respectively. Commercial vehicles though constitute only about 5% of the total fleet, contribute to nearly 80% of total PM emissions.
Phase-wise implementation of fleet modernization (transforming pre BS-IV commercial vehicles to BS-VI) would lead to a 40-80% reduction in PM and NOx emissions from the sector by 2025.
The total number of avoided mortality from attributable to PM5 reduction from fleet modernization between 2020 and 2040 is estimated to be more than 500,000.
The net present value of the total economic cost to the consumer because of fleet modernization is estimated to be INR 13,000 billion and the total economic benefit is estimated to be INR 14,200 billion. Thus the cost-benefit ratio of fleet modernization is estimated to be 1:1.
If the government provides a 50% excise duty exemption on the purchase of a new vehicle, the total cost of the vehicle to the consumer will decline by 8-10% than the current price.
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TERI is inviting public comments, before 31st December, on this draft policy brief. Please send us your valuable thoughts on this publication to Ms Shivani Sharma at email@example.com.