New Delhi, May 27: The road transport ministry is drawing up a list of incentives for consumers to sell cars which are 11 years or more old, including a 50 per cent cut in excise duty on new car purchases.

A fair value for the scrap and discounts by auto makers are among the other incentives on offer as part of a voluntary vehicle modernisation programme.

The incentives can reduce the cost of buying a vehicle by 8-12 per cent.

The plan, currently in the form of a concept note, needs to be accepted by other ministries before it can become a policy. Road ministry officials said getting an approval from the finance ministry for the excise duty cut could be a hurdle.

Analysts said the modernisation programme could not only replace around 28 million old vehicles with environment friendly BS-IV compliant cars but also boost auto sales.

"The voluntary vehicle fleet modernisation policy is an important initiative to address the increasing emission levels across the major cities in India," said Abdul Majeed, partner at PwC, and an auto expert.

In 2013, the then commerce minister Anand Sharma had pitched for sops up to Rs 1 lakh for phasing out commercial vehicles more than 15 years old. But the plan was rejected by the finance ministry.

The modernisation plan targets vehicles bought on or before March 31, 2005. The policy has the potential to reduce emission by 25-30 per cent and save oil consumption by 3.2 billion litres annually.