Here’s all you need to know about the vehicle scrappage policy!

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Under the new vehicle scrappage policy, new vehicle buyers are set to receive a host of benefits, if they opt for scrapping of their old and polluting vehicles. The transport minister had termed the policy as a boon that would lead to a 30 per cent increase in the industry turnover in the coming years.

Announced in the new Union Budget, the personal vehicles are set to undergo a fitness test after 20 years, while the duration is 15 years for the commercial vehicles. Nitin Gadkari, the transport minister is going to unveil the finer details of the policy soon. As far as disincentives for not opting for scrapping policy are concerned, there are provisions of green taxes and other levies.

According to the transport minister, there are huge benefits of the policy, as the research has pointed out that an old four-seater sedan will result in losses of Rs 1.8 lakh in years, while the losses for heavy vehicles will amount to Rs 8 lakh for three years. The policy also includes heavy penalties for driving vehicles that fail to pass the automated tests.

“This policy will boost buying of new vehicles besides generating huge employment. Automobile industry turnover which is 4.5 lakh crore at present is likely to swell to Rs 10 lakh crore in the years to come with India becoming an automobile hub,” said the minister.

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Mr Gadkari also said that the export component, which is Rs 1.45 lakh crore at present will go up to Rs 3 Lakh crore. The policy will also lead to the usage of scrapped material like steel, plastic, rubber and aluminium etc., in the manufacturing of automobile parts, reducing the cost by 30 to 40 per cent, he added.

The vehicle scrappage policy is likely to boost new technologies with better mileage of vehicles, other than promoting green fuel and electricity. It will result in Rs 10 lakh crore crude imports. The policy will also lead to new investments of around Rs 10,000 crore, while creating 50,000 jobs, estimated Gadkari.

Around 51 lakh Light Motor Vehicles (LMVs) above 20 years, along with 34 lakh LMVs above 15 years would be covered in the policy. It will also include around 17 lakh medium and heavy motor vehicles of more than 15 years of age.

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Last modified: February 23, 2021

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