The Indian automobile industry stands to benefit immensely from the vehicle scrappage policy to be implemented shortly by the government, said Union Minister for Road Transport & Highways, Nitin Gadkari. He said this at the 56th ACMA annual session, held in New Delhi on August 30. The policy, which would see old cars being scrapped and scrap aluminium, steel, and copper recovered and supplied to OEM manufacturers at cheaper rates, will be implemented in a phased manner. In Phase I of the drive, commercial vehicles that are more than 15 years old would be taken off the roads and scrapped.
The policy, Gadkari said, will prove to be beneficial not only for the country's automobile industry but also for the vehicle and auto parts manufacturers and the government. It has been estimated that the central government can earn up to INR4,000 crore, and the state governments up to INR10,000 because of the new policy. Special incentives have also been planned for the car owners who would offer to scrap their vehicles; incentives could be either in the form of concession from the manufacturers and/or from the state and central governments.
A space covering a total area of one lakh acre has been allotted in Kandla for making an auto cluster, where the old and used cars would be scrapped and the scrap aluminium and other metallic auto parts recovered from it would be transported off to the manufacturers' facilities at cheaper rates for recovering secondary aluminium and other metal of substantial economic value. The prospect of scrap aluminium and other metals being used to produce secondary metal products will lower the dependence of the industry on such raw material imports, thereby providing benefits to the domestic manufacturers and suppliers.
India's automobile industry turnover is presently on a growth trajectory. In the next ten years it is slated to grow over four times to reach INR20 lakh crore and occupy the top slot in the international arena. Gadkari said the industry registered a growth of 8 per cent and accounted for exports to the tune of INR70,000 crore in 2015.
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