Old vehicles scrappage policy awaiting fine-tune by concerned ministries: Nirmala Sitharaman

Scrappage policy for old vehicles is awaiting a “fine-tune” by concerned ministries, and as soon as that is done it will be announced. Such was the statement from the Finance Minister Nirmala Sitharaman on Saturday, February 1, after the Union Budget 2020-21.

She said, "Scrappage policy is in the works ... I would wait for the concerned ministries also to fine-tune everything and tie up the loose ends and then come to a stage where it can be announced by the ministry.”

"So many things depend on how far they are mature and right for me to use it in the budget, but that does not mean because I've not announced it in the budget no work is going on in that area," she added.

The policy, once approved, will reportedly be applicable for all vehicles, including two-wheelers and three-wheelers.

Road Transport and Highways Minister Nitin Gadkari had said earlier that after the policy comes into effect, India may become a potential hub for automobile manufacturing with abundant availability of aluminium, steel, and plastic from vehicles scrap. This may further result in automobile price fall by 20 to 30 per cent, added Gadkari.

The government on July 26, 2019, in a bid to spur electrical vehicles adoption, had proposed amendments to motor vehicle norms to allow scrapping of vehicles older than 15 years.

Earlier last week, Toyota Kirloskar Motor (TKM), also urged the government to announce scrappage policy in the budget and sought the extension of income tax benefits available for electric cars.

"We would like the Budget to spur demand without putting any additional burden on the government exchequer; one way to achieve this is by realising the scrappage policy for all old vehicles, the draft policy of which has been shared by the government," said TKM Senior Vice-President Naveen Soni.