New Scrappage Policy to Remove Older, Polluting Cars is Coming Soon

Government is set to release scrappage policy – says Nitin Gadkari

Indian Car Market
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Government is set to release scrappage policy – says Nitin Gadkari

Nitin Gadkari spoke at the 59th annual conference of the Society of Indian Automobile Manufacturers (SIAM). He clearly iterated the government is working on introducing a scrappage policy in the near future.

The announcement came at a time when the new car market is reeling through a major hit on sales & profits – 15,000 jobs have been lost to date and almost 1 lakh jobs are on the line as per ACMA. 

It’s been some time that SIAM has been constantly adjuring the government the ministry to formulate scrappage policy to remove older, polluting vehicles from the country’s roads. We must not forget, this will clear the path for OEMs, and create demand for the new-car market. Additionally, the car manufacturers have requested for reductions in GST for the new vehicles. The entire automotive sector combined currently contributes 28 percent of the total GST along with the cess levied from the buyers (used + new cars). 

The minister said – the government is currently working on streamlining the organized as well as unorganized scrappage dealers. The inter ministerial talks indicate that they are considering capacity-building measures to build policies around scrappage in both formal as well as informal sectors. It is suggested that the government should also consider setting up fitness centers for both private and commercial vehicles to certify the fitness of a vehicle as part of this scheme. 

Further, the minister suggested reducing taxes on hybrid vehicles, electric vehicles along with reducing taxes on fuel for a short time period to pump up the sales. 

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