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Last Updated : Dec 04, 2019 03:38 PM IST | Source: Moneycontrol.com

Auto stocks rally 1-3% on hopes of scrappage policy approval

According to sources, the registration charge may be removed for exchange of old to new cars and there may be heavy road tax on cars older than 15 years.

 
 
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Shares of auto stocks gained between 1-3 percent on November 27 after media reports suggested that the government could approve scrappage policy in today's meeting.

The Nifty Auto index climbed 1.7 percent at 10:39 hours IST. The index has rallied 17 percent since the corporate tax rate cut and several other government measures, which was higher compared to 12 percent rally in Nifty50 index.

Bharat Forge, Tata Motors, M&M, Ashok Leyland, Maruti Suzuki, Eicher Motors, Hero MotoCorp, Apollo Tyres and Bosch gained 1-3 percent.

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Here is the auto stocks performance since September 19, 2019:

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Cabinet Committee on Economic Affairs could approve scrappage policy in today's meeting, reports CNBC-TV18 quoting unnamed sources.

"Discounts may be offered on buying new in exchange of old cars. The proposal is to offer road tax discounts on exchange of old for new cars," sources told business channel.

According to sources, the registration charge may be removed for exchange of old to new cars and there may be heavy road tax on cars older than 15 years.

The proposal is to charge 25 times original registration charges on old cars and registration charges for renewal of old commercial vehicle may increase to Rs 40,000 from Rs 1,500, sources said.

The Road Transport Ministry had prepared a draft note on scrappage policy for vehicles older than 15 years in September this year.

Last week, while talking to CNBC-TV18, Union Transport Minister Nitin Gadkari said the draft policy was in its final stages and the government was only waiting for a nod from the cabinet.

“It is in the last stage. In due course, it will be approved by the Cabinet and the government will implement it. This scrapping policy is going to encourage automobile manufacturing activities in the country and help India become an automobile manufacturing hub. It creates more employment and reduces the cost of the cars.”

 



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First Published on Nov 27, 2019 11:10 am
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