The vehicle scrapping policy will be a “win-win” policy that will eventually help in improving fuel efficiency and reduce pollution, Union minister Nitin Gadkari said on Thursday. Making a statement regarding vehicle scrapping policy in the Lok Sabha, the Road Transport, Highways and MSMEs Minister said the policy will also lead to an increase in the country’s automobile industry turnover to Rs 10 lakh crore from the current Rs 4.5 lakh crore.
Announced in the 2021-22 Union Budget, the policy provides for fitness tests after 20 years for personal vehicles, while commercial vehicles would require it after the completion of 15 years.
Gadkari has also issued an advisory to automakers, advising them to provide an incentive of a five percent rebate for those buying a new vehicle after producing a scrapping certificate.
Noting that the policy will be a “win-win” policy, the minister said it will help improve fuel efficiency, reduce pollution and GST income will also rise due to the purchase of new vehicles.
Rajeev Singh, Partner and Automotive Leader, Deloitte India:
“We welcome the announcement made by Ministry of Transport and it’s a good mix of both – incentives for those who opt to scrap their old vehicles and an additional burden for those who would like to continue with their old vehicles. This fine balance should help in driving old vehicles out of Road leading to a reduction in pollution levels and driving demand for new vehicles across all the segments. This announcement will also lead to the creation of more scrapyards in the country and effective recovery of waste from old vehicles”
Earlier this month, the Delhi government announced scrapping incentives, including up to Rs 7,500 per vehicle for auto and light commercial vehicles, under the Delhi Electric Vehicle Policy 2020. The Delhi government notified the Delhi EV Policy 2020 on 7th August 2020, with an intention to promote the adoption of clean mobility solutions.
The Delhi Government order issued on 25 February 2021 in this regard mandates conversion of all vehicles owned/leased by the Government of NCT of Delhi to transition to electric by 6 Aug August 2021.
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