The Vehicle Scrapping Policy introduced in the 2021 budget was finally launched on August 13 during an investor summit held at Mahatma Mandir, Gandhinagar, Gujarat. The Policy was launched by Prime Minister Narendra Modi and was aimed at developing fuel-efficient vehicles that follow environmental norms make auto components that are less expensive and reduce the cost of raw material for the automobile industry by approximately 40 percent.
The Summit is aimed at attracting focus on collaborations that were presented by the ship-breaking industry at Alang, Asia’s biggest ship-breaking hub in Bhavnagar, Gujarat. The new policy will be a boost for Alang to become the Vehicle Scrapping hub of India.
Union Minister Nitin Gadkari said, “With regular scrapping close to 99 percent of metal waste can be recovered. This will bring down the cost of raw material by approximately 40 percent.”
He added that this will make components less expensive and help increase competitiveness in the international markets. “With the increase in sales of automobiles, the government will get a profit of Rs 30,000 – 40,000 crores in GST”, said Gadkari.
In his speech PM Modi said, the manner in which technology is changing, be it our lifestyle or our economy – there will be a lot of changes in both of them. “Amid these changes, it is also important to protect our environment, our land, our resources, our raw material,” said PM Modi.
“The effort is to make development a sustainable one, an environment-friendly one. We are experiencing the challenges of climate change. So, in the interest of its citizens, India has to take major steps,” added PM Modi.
Key takeaways:
- The Investor Summit is organised in Gujarat by the Gujarat government and the Ministry of Road Transport and Highways to attract investors to invest in setting up vehicle scrapping infrastructure under the Voluntary Vehicle-Fleet Modernization Program or the Vehicle Scrapping Policy.
- The Vehicle Scrappage policy has been implemented to create an eco-system to discard old, unfit and polluting vehicles so as to manufacture environmentally friendly and safe vehicles.
- The policy is aimed at bringing a transformational change in the automobile sector by reducing vehicular emissions of pollutants.
- The policy was announced by the Union Finance Minister Nirmala Sitharaman on February 1, 2021 during the Union budget.
- All consumer vehicles have to undergo fitness tests in designated auto centres across various districts. For consumer vehicles, the age of vehicles is 20 years while for commercial vehicles fitness tests will be conducted after 15 years.
- The proposed policy is also expected to generate employment opportunities for 50,000 people and attract investment worth Rs 10,000 crores.
- Consumers will also, receive an incentive namely a road tax rebate of up to 25 per cent for passenger vehicles, 15 per cent for commercial vehicles and a five per cent discount from automobile manufacturers on buying new vehicles (Discount by manufacturer is still under consideration and has not been finalized yet ).
