The Society of Indian Automobile Manufacturers has asked the government to scrap about 70 million old vehicles, including cars, even as a transporters' body opposed any such move which could severely affect the domestic auto industry.

SIAM president Jagdish Khattar is believed to have suggested to Finance Minister P Chidambaram in one of the pre-budget consultations that more than 10-year-old commercial vehicles and over 15-year-old cars be scrapped.

Taking umbrage on SIAM's plea, the All India Motor Transport Congress accused the apex body of vehicle manufacturers of vested interest.

"SIAM members want to push up sales. India's economy is not ripe enough to scrap 15-year-old vehicles and if the government plays into the hands of auto manufacturers, we will resort to agitation," AIMTC secretary general J M Saksena told PTI.

With the phasing out of old cars, SIAM has calculated the additional excise income to the Centre at Rs 4,500 crore (Rs 45 billion) while in the case of state governments, the gain would be an additional sales tax close to Rs 2,500 crore (Rs 25 billion).

Phasing out of old vehicles would not only minimise health hazards in terms of pollution and safety, but would also lead to a spurt in sales, which in turn, would yield more excise to the government, industry sources said.

While buses and trucks had to obtain fitness certificate covering safety, emission, and road-worthiness, personal vehicles had to get only 'pollution under control' certificates, they said.

Though the benefits of scrapping of old vehicles would be 'enormous', SIAM is of the view that implementation will not be easy.

Even if the benefits were evident, implementation would be easier said than done as the move would be resisted by the owners of old vehicles and the cost structure of the economy would go up, leading to widespread political ramifications, the industry sources said.

But the government was empowered to specify the age limit for vehicles. The Motor Vehicle Act allowed the government to specify the age limit of vehicles, they said.

Saksena, however, said: "The Motor Vehicle Act does not talk about the age of a vehicle; it talks about the fitness. As long as a vehicle has a road-worthiness certificate, it cannot be scrapped.

"SIAM is trying to push its own agenda in the garb of public interest. Their (automakers') sole idea is to jack up their sales and pocket the profits at the expense of millions of vehicle owners."

SIAM has sought the help of both the Centre and state governments to work out a package of fiscal incentives to junk old vehicles.