Automobile Scrappage Policy will benefit new car buyers: PM Modi

In a bid to reduce the pollutants emitted by automobiles, Prime Minister Narendra Modi has launched the National Automobile Scrappage Policy. The policy seeks to incentivise owners of old vehicles by providing monetary benefits on buying new cars after scrapping their vehicles, writes Shravan Nune.

New Delhi: In a bid to reduce the pollutants emitted by automobiles, Prime Minister Narendra Modi has launched National Automobile Scrappage Policy on the side lines of Gujarat Investor Summit. Addressing the summit via videoconferencing, the Prime Minister has said that the new policy will help phase polluting vehicles in an environment-friendly manner.

“Modernity in mobility reduces the burden of travel and transportation. It also proves helpful for economic development. Vehicle scrapping will help phase out unfit and polluting vehicles in an environmentally-friendly manner,” the Prime Minister said on the occasion. The Prime Minister further said that the Vehicle Scrappage Policy will play a key role in the 'Waste to Wealth' programme.

According to the Prime Minister, the initiative will open up a new range of business opportunities across the country, especially in Gujarat which is known for its ship breaking and recycling industry. "The launch of Vehicle Scrappage Policy today is a significant milestone in India’s development journey. The Investor Summit in Gujarat for setting up vehicle scrapping infrastructure opens a new range of possibilities. I would request our youth & start-ups to join this programme." said the Prime Minister.

Waiver of vehicle registration charges, exemption in road tax

The Prime Minister said that the general public 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. Whoever 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. There will be some relief from the high risk of road accidents due to old vehicles and old technology. Fourth, it will reduce the harmful impact of pollution on our health.

More tax revenue for Centre, States

Giving more details on the policy, union transport minister Nitin Gadkari said that it will bring down the cost of raw material by around 40 per cent. “Around 99 per cent of recovery (metal waste) can be done with regular scrapping. It will bring down the cost of raw material by approximately 40 per cent. It will also make components less expensive and increase our competitiveness in the international market,” Gadkari said on the occasion.

The minister further said the policy will lead to increased sales of automobiles in the country ultimately benefiting both the Centre and States in terms of higher revenue realisation. “As per an estimate, with increased sales of automobiles, the government will get an additional Rs 30,000-40,000 crore in Goods and Services Tax. State Governments will also get a similar amount,” said the minister via videoconferencing.