Prime Minister Narendra Modi urged the youth and start-ups to join the program under the new Vehicle Scrappage Policy on Friday at the Gujarat Investor Summit.
Modi mentioned that the new automobile policy would encourage a circular economy, making economic development more environment-friendly.
Launching the policy, the Prime Minister said, “The launch of Vehicle Scrappage Policy today is a significant milestone in India’s development journey.”
He also stated that the policy would create employment and give the sector a “new identity” while also reducing the country’s carbon footprint.
The policy took shape under the guidance of the Union transport minister Nitin Gadkari earlier this year, Gujarat Chief Minister Vijay Rupani.
Gadkari was also present at the summit, which the Prime Minister virtually addressed.
Calling the program a “waste-to-wealth mission”, Modi claimed it would surely bring investments in the country. “The policy will bring investments worth more than Rs 10,000 crore and, in the process, create employment opportunities for thousands of youngsters,” he said.
The policy will enable commercial vehicles and personal vehicles, older than 15 and 20 years respectively, to undertake a fitness test at the ‘automated fitness centers’.
All the vehicles which fail the test would be recycled and certified as ‘end-of-life vehicles’. But if the vehicle does pass the test, there will be a sizeable re-registration fee for the owners.
The re-registration would be nearly eight times for personal vehicles, while 20 times for commercial ones.
The policy keeps in mind the urban pollution levels and aims at bringing the environmental factor into the industry.
“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,” PM said.
Nitin Gadkari, who was also present at the launch, said, “With regular scrapping of (old and dilapidated vehicles), close to 99% of metal waste can be recovered.
This(policy) will, in effect, bring down the cost of raw material by approximately 40%.”
The Union Minister also underlined the cost-cutting incentives it offers while also helping global competitiveness. “With the increase in automobile sales, the government will earn Rs 30,000 crore to Rs 40,000 crore from GST (Goods and Services Tax),” he said.
The policy offers around 4-6 percent return on the vehicle’s ex-showroom price, excluding the registration fee at RTO and insurance if the vehicle is scrapped at the approved centers.
Additionally, the new vehicle owner gets a 5 percent discount if they show the issued scrapping certificate.