Vehicle Ban Projected To Generate Rs 4.5 Lakh Crore Economic Boost: GTRI

New Delhi, Jun 24 (KNN) Delhi's upcoming fuel ban on diesel vehicles older than 10 years and petrol vehicles older than 15 years, set to take effect from July 1, 2025, is projected to generate approximately Rs 4.5 lakh crore in economic benefits for automotive companies, importers, and government tax collections, according to a recent analysis by the Global Trade Research Initiative (GTRI).

The policy prohibits older vehicles from refuelling at petrol pumps across the capital, with enforcement conducted through Automated Number Plate Recognition (ANPR) cameras installed at fuel stations that connect to the VAHAN database.

The ban is expected to impact an estimated 1.8 million four-wheelers and 4.4 million two-wheelers in the National Capital Region, which includes Delhi and surrounding urban centres such as Noida, Gurugram, and Ghaziabad.

GTRI's economic projections indicate that if the 1.8 million affected four-wheelers are replaced with new vehicles averaging Rs 15 lakh each, the automotive industry could see a total turnover of Rs 2.7 lakh crore.

The vehicle replacement program is anticipated to generate substantial tax revenue, with the central government expected to collect approximately Rs 1.35 lakh crore from GST and compensation cess, while the Delhi government stands to gain around Rs 42,187 crore from road tax and diesel surcharges.

The research organisation noted that actual revenue figures could be significantly higher, stating that real values will likely be at least 50 percent greater since their calculations do not account for the replacement of 4.4 million two-wheelers affected by the policy.

However, the ban presents significant challenges for economically vulnerable populations, including small business owners, informal sector workers, and middle-class families who depend on older vehicles for transportation and income generation.

The policy's impact on these groups raises concerns about accessibility and economic burden.

GTRI recommended that India adopt international best practices for vehicle fleet modernisation, suggesting the implementation of rigorous and transparent emission-testing systems and the gradual introduction of green zones rather than imposing blanket age-based restrictions.

The organisation noted that most major countries typically avoid outright bans based solely on vehicle age, instead employing a combination of stricter emissions standards, roadworthiness inspections, and economic incentives to phase out high-polluting older vehicles.

(KNN Bureau)