Vehicle Scrappage Policy expected to bring in Rs 10,000 crore investment

The Vehicle Scrappage Policy was launched by Prime Minister, Narendra Modi at the Investor Summit in Gujarat and is expected to bring in investments of close to Rs 10,000 crore and generate 35,000 job opportunities.

In a series of tweets, the Prime Minister said the launch, “opens a new range of possibilities. I would request our youth & start-ups to join this programme. Vehicle scrapping will help phase out unfit and polluting vehicles in an environment friendly manner. Our aim is to create a viable circular economy & bring value for all stakeholders while being environmentally responsible."

Minister of Road Transport & Highways Nitin Gadkari added that the, “Automobile industry is the highest revenue-producing sector which also contributes to the employment of a large number of people in the country; Government is looking forward to provide all needed support to make this industry.”

The Government of Gujarat signed six Memorandum of Understanding (MoUs) with CERO Recycling, Tata Motors, CMR- Kataria Recycling, Modest Infrastructure, Mascot Engitech and Mono Steel. Another MoU was also signed between Assam Government and SM Group from Assam. 

The Prime MInister highlighted that under the new policy, vehicles will not be scrapped merely on the basis of age and clarified that “Vehicles will be scientifically tested through authorised, automated testing centres. Unfit vehicles will be scrapped scientifically. It will ensure that registered vehicle scrapping facilities all over the counties are technology driven and transparent”. Reiterating the importance of scientific scrapping, the PM added that "Auto and metal industry will get a big boost from this program. Last year alone, we had to import scrap steel worth about Rs 23,000 crore. Because the scrapping that happens in India till now is not productive. Energy recovery is negligible, high-strength steel alloys are not fully valued, and precious metals cannot be recovered. Now when there is a scientific, technology based scrapping, we will be able to recover even rare earth metals." 

He further highlighted the long-term benefits of the Vehicle Scrappage Policy, "Normal families will benefit greatly from this policy in every way. The first advantage will be that a certificate will be given on scrapping the old vehicle. The person who has this certificate will not have to pay any money for registration on the purchase of a new vehicle. Along with this, he will also be given some exemption in road tax. The second benefit will be that the maintenance cost, repair cost, fuel efficiency of the old vehicle will also be saved in this. The third benefit is directly related to life. Due to old vehicles, old technology, the risk of road accident is very high, it will get rid of it. Fourth, it will also reduce the impact of pollution on our health."

According to estimates by the Ministry of Road Transport and Highways, India has a little over five million light motor vehicles which are older than 20 years and another 3.4 million of over 15 years. Additionally, 1.7 million M&HCVs which are older than 15 years continue to operate without a valid fitness certificate.

However, at present there are only seven automated fitness test centres and two authorised scrappage centres.