PM Modi announces policy to phase out old vehicles, know what will be the effect on old vehicles!

The Prime Minister, Shri Narendra Modi launches the Vehicle Scrappage Policy at the Investor Summit in Gujarat, through video conferencing, in New Delhi on August 13, 2021. Image Source: PMO India

PM Modi launched the scrappage policy in a virtual address to Gujarat’s investment summit. He, while launching expressed that this policy will lead to an investment of Rs 10,000 crore in India’s Gujarat.

PM Narendra Modi said it was being introduced to promote a circular economy, and it will benefit the middle class, greatly. A certificate will be provided, to those scrapping their vehicles and subsequently can avail discount on the purchase of the new car.

Road Transport and Highways Minister Nitin Gadkari present at the occasion explained it could lower the cost of raw material by around 40 per cent and can make India an industrial hub of automobile manufacturing.

All districts in the country will have a testing centre built on a private-public partnership model. There are over one crore unfit vehicles in the country.

Under this policy, old and unfit vehicles that cause pollution will be phased out in a scientific and environmentally friendly manner.

All commercial vehicles over 15 years of age and personal vehicles over 20 years old are subject to scrappage; the government-owned vehicles will be the first to adhere to the policy, followed by heavy commercial and personal vehicles.

Scrappage will lessen the cost of the components and boost the competitiveness of Indian vehicles in the international market.

This policy will additionally generate 30,000 – 40,000 crore in GST for the government.

As per the Ministry of Road Transport and Highways, there were 1.7 million old medium and heavy commercial vehicles on Indian roads as of April 2021.

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