However, as per the latest update, only vehicles older than 20 years will be eligible to opt for the scheme from April 1, 2020.
As per the latest update, the two major changes made to MORTH's earlier draft note include a change in the age of the vehicle from 15 years to 20 years and cut off date for implementation from April 1, 2020, coinciding with the implementation of BS-VI norms, the rating agency said.
"If we look at the various vehicle segments in the commercial vehicles industry, very few vehicles would actually be older than 20 years in the current vehicular population. Medium and heavy commercial vehicles (MHCVs) that typically have a life of 20 years, would be eligible under the scrappage scheme," it said.
It added that under MHCVs, medium commercial vehicles (16 tonne gross vehicle weight) would benefit the most, while the number of multi-axle vehicles, intermediate commercial vehicles (ICVs), tractor trailers and light commercial vehicles opting for the scheme would be very limited.
"Though the benefit offered under the scrappage policy is expected to be 15 per cent of the vehicle's price, the effect will be muted as prices of diesel vehicles are expected to go up by 10-15 per cent once the new norms come into force," it said.