Nitin Gadkari, the Minister for Road Transport and Highways made a case for scrapping at the 64th Annual Convention of SIAM. He urged the automobile industry to increase the number of scrapping centres and raise the 3% scrap discount. He reiterated that the 3% number should be the minimum bar, not the maximum. He also gave the example of the European and US markets rolling out 12- 13% scrap discounts to woo customers. The industry’s contribution to manufacturing GDP is 35%, said Gadkari. The industry has a growth rate of 13%.
“I request the automobile industry to establish scrap centres,” said Gadkari. In India, there are 63 scrapping centres while 60 are under construction and 40 are in the pipeline. Scrapping reduces the cost of a component by 30-40%, making it a win-win situation as it will increase the profit margins. The minister further asked the automobile industry to consider setting up scrapping centres and fitness centres in the country.
Gadkari on EVs
Earlier, Gadkari said that electric vehicles (EVs) would cost the same as petrol and diesel in another two to three years. Interestingly, as reported by Express Drives, Gadkari made a case for no subsidies for electric vehicles. According to the Minister, EV manufacturers in India have reached a point of sustainability, enabling them to thrive without relying on government subsidies.
India’s automotive industry growing
The Indian automobile industry’s size stands at Rs 22 lakh crore, which is the third largest in the world, surpassing Japan and is behind China and the USA. Also, India is the third-largest passenger vehicle market in the world and the largest two-wheeler market in the world. Thus, making the automobile industry a growth engine for India’s economy. Talking about tax contributions from the automotive sector, he pointed out that the government collects Rs 3 lakh crore GST through the industry.
Furthermore, the minister emphasised the adoption of new technology saying that the markets for the automobile industry will surely increase in future that’s why people should stop thinking about petrol and diesel prices.
He added that the government is keenly interested in the gas economy. The CNG vehicle market is Rs 8 lakh crore. In 2014, India had only around 750 CNG stations. In 2024, we’ll have 6,000 CNG stations and the target for 2030 is to make 20,000 CNG stations.
