The proposed plan to modernize the country’s vehicles and scrap aging vehicles was taken forward at a meeting held between Finance Minister Arun Jaitley and Transport Minister Nitin Gadkari.
Discussions were held with regard to proposed Voluntary Vehicle Fleet Modernisation Programme (V-VMP) by the Road Transport and Highways Ministry to scrap 28 million, decade old polluting vehicles. Nitin Gadkari has informed that a new Vehicle Scrapping Policy is being framed to scrap 15-year-old polluting vehicles.
Finance Minister reiterated that 65% of pollution is caused by heavy vehicles over 15 years of age and this should be taken as the first phase of scrapping of aging vehicles. He has stated that scrapping of vehicles be made mandatory and not voluntary. Jaitley also stated that instead of tax exemptions, provision of funds will be made in the budget to those scrapping old vehicles.
The draft Voluntary Vehicle Fleet Modernization Program (V-VMP) policy initially included 28 million vehicles purchased on or prior to March 31, 2005. The policy, if finalized, will give rise to additional revenue to the extent of INR 21,000 crores in the form of additional automobile sales while crude oil savings could be to the extent of INR 7,700 crores arising from improved fuel efficiency.
Scrapping of ageing vehicles will also result in steel scrap generation of INR 5,500 crores and employment of workforce for scrapping and recycling functions. The aim of this scheme is to reduce vehicle emission by as much as 25-30 percent and fuel consumption by 3.2 billion liters each year.