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Vehicle Scrappage Policy would bring Rs 43,000 crore opportunity to the Indian market

Vehicles in Scrappage Yard / Representation

Vehicles in Scrappage Yard / Representation

Proper implementation of vehicle scrappage policy would bring Rs 43000 crore opportunity to the Indian market: Scrappage policy proposed would bring Rs 43,000 crore business opportunity to the Indian market and can generate new business and rev-up India’s flagging auto industry. Scrappage policy is in discussion for a very long time but not implemented so far.

But, new research by automotive experts stated that a well-defined scrappage policy would create a business opportunity and fresh jobs worth Rs 43,000 crore ($6 billion). A prolonged slowdown has hit the automobile market, but this scrappage policy would revive the same.

Transport Minister Nitin Gadkari, the policy would soon come live. Scrapped vehicles are the source of steel, copper, aluminum, which helps in reducing imports. Getting rid of old vehicles should not only be applied to the commercial vehicle industry but also to passenger cars and two-wheelers.


This getting rid of vehicles will lower the pollution and government’s oil bill as the vehicles which are coming now would be fuel-efficient. In order to achieve this feat, the government should offer sizeable financial incentives, develop a resale market for the scrappage certificate, and fix the life period for the vehicles. According to HDFC Bank, 9 million vehicles would go off-road by 2021 and 28 million vehicles by 2025, largely two-wheeler.

Also, it is estimated that carbon dioxide emissions would be controlled by 17% and particulate matter by 24%. With this policy being implemented, half of BS-II and BS-III vehicles would be off-road, and it would save 8 million tonnes of oil a year. A comprehensive policy will save vehicle costs, save foreign exchange, and increase revenues in the long term.

The policy would be win-win for all like customers save GST and get additional discounts, dealers gain from greater demand of vehicles, vehicle makers will get recycled metals and save import bills and get tax revenue from new vehicle sales. Scrappage policy, as of now, is given as 15 years for passenger cars, ten years for commercial vehicles, and in certain cases of commercial vehicles, it is tagged as 7-8 years.


Vehicle Scrappage Policy would bring Rs 43,000 crore opportunity to the Indian market