Mr. Nitin Gadkari has announced that the draft of much awaited scrapping policy is ready. The same will be revealed to the public in a week’s time. Once out in the public domain, Govt will take suggestions from consumers, manufacturers, etc to make changes if necessary.
Post which, the policy will be forwarded to Finance Ministry. Once approved from the Finance Ministry, the scrapping policy will be sent to the cabinet.
With Indian auto industry touted to become one of the three largest in the world by 2020, it was essential for the government to bring in scrapping old vehicles policy. This policy will not only help govt remove old and outdated vehicles from the road, but will also help them in reducing pollution.
Apart from this, it will also fuel the growth of new vehicle sales. As per the initial report auto industry’s turnover is set to be boosted by atleast four times with the introduction of scrapping old vehicles policy. As of last year, turnover of the auto industry stood at about INR 4.5 lakh crore. By 2020 this will increase to INR 20 lakh crore.
So how does the govt plan on making consumers scrap their old vehicles for new? According to the draft, govt will introduce ‘end of life’ policy. As per this, consumers will no longer be able to use the vehicle once it reaches its end of life.
Under the scrapping policy, when you go to buy a new vehicle, you will be given rebates like 50% cut in excise duty, discounts on new vehicle, etc. Such schemes should be able to motivate consumers in selling outdated vehicles for new ones. In money terms, for small cars consumers can expect discounts of about INR 30,000, and for big vehicles like trucks the discounts could go up to INR 1.5 lakh under the scrapping policy.
What will govt do of the old vehicles? Govt plans on recycling the usable components of scrapped cars, like aluminium, steel copper and sell it in the market for 50% less than what it is offered at today. Govt is planning a total of 29 such industrial clusters near 12 important ports in India, where such recycling will take place.