14.8.21

Vehicle scrapping policy unveiled

Prime Minister Narendra Modi launched the national automobile scrappage policy. He said the move will promote a circular economy and make the process of economic development more sustainable and environment-friendly.

The policy, aimed at recycling polluting and unfit vehicles, will give a fresh impetus to India's mobility and auto sector, Modi said while addressing the virtual launch of the initiative during 'Investors Summit' organized in Gandhinagar.

“We are promoting a circular economy. Apart from reducing pollution, this policy will also make India self-reliant in automobile and metal sectors. We imported scrap steel worth Rs 23,000 crore last year because recovery of metals in our country is not enough. With this policy, we can now recover even rare earth metals in a scientific manner," said Modi. The policy would attract an investment of Rs 10,000 crore and create thousands of employment opportunities, the PM added.

Data shared by the Union transport ministry revealed that an estimated 1 crore unfit vehicles which can be recycled immediately in India. Of these, 4 lakh are in Gujarat. The summit, attended by potential investors and industry players, was organized to attract investment to set up vehicle scrapping infrastructure under the Voluntary Vehicle-Fleet Modernization Programme.

The policy will give a new identity to India in the mobility and auto sector, Modi said. “It will play a major role in removing unfit vehicles from our roads in a scientific manner. It will modernize vehicular population on city roads,” he added. The policy will play a key role in the ‘Waste to Wealth’ programme, Modi said.

CM Vijay Rupani and Union Road Transport and Highways Minister Nitin Gadkari were present at the event in Gandhinagar. Gadkari said the policy is based on fitness and not age of the vehicles. It will boost manufacturing, create jobs and help both Centre and state to earn up to Rs 40,000 crore each in GST, he added.

"If we recycle on a continuous basis, we can recover 99% of the materials. As per an estimate, this will lead to a reduction of 40% in the raw material cost, reducing prices and pushing sales," said the minister. As per an estimate, states as well as Centre's GST income would increase by Rs 30,000 to Rs 40,000 crore each once the sale of vehicles picks up, he added.

Sources said the timeline of the policy stipulates final rules of the policy be notified by September 25, 2021. By April1, 2023, mandatory automated fitness testing for heavy commercial vehicles should become effective. From June 1, 2024, phased introduction of mandatory automated fitness testing for all other remaining categories of vehicles should begin.

State government officials said it could take a few months for players to set up scrappage infrastructure, after which it will issue specific guidelines on scrapping of vehicles.

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