Vehicle scrappage policy is in the final stage of approval, awaited for Union Cabinet’s nod: Nitin Gadkari

Speaking at the inauguration of Auto Expo 2020 on Thursday, July 2, Union road transport and highways minister Nitin Gadkari confirmed that the long-delayed vehicle scrappage policy is in its last lap and to be rolled out soon.

Two days before Mr Gadkari said this, finance minister Nirmala Sitharaman reported that several rounds of inter-ministerial consultation related to the vehicle scrappage policy are already done. The policy is now close to finalisation.

The proposed policy in India, which is seen as an attempt to eradicate the fleet of aged, polluting commercial vehicles and boost demand for new cars, is in progress for over the past six months.

Gadkari said the policy is approved from his end, and now it has to get a nod from the Union Cabinet.

"It is in the final stages and I have already cleared it from my side and I think this policy would be a great boon for the automobile industry," commented road transport minister.

In August 2019, Ms Sitharaman had talked about the scrappage policy for automobiles while announcing several steps aimed at increasing automobile production and capacity utilisation.

Thereafter, in October, the road ministry issued draft guidelines to set up vehicle scrapping centres in India to protect the environment and promote a legally-backed dismantling and scrapping industry.

The policy is expected to help the automobile industry, especially during the economic disruption that has hit hard the automobile sector, by reducing its dependence on primary copper and aluminium for raw materials. Instead, the automakers can use extracted scrap for the production.

Gadkari believes that India has the potential to emerge as a prime hub for automobile manufacturing with the policy being approved, as key raw materials would be available from the scrappage. Also, the policy is expected to reduce automobile prices by 20-30 per cent.

He also believes that promoting alternate technologies such as electric vehicles is important from the point of reducing India's import bill and fighting pollution.

"Few days ago, I was at the launch of two electric vehicles, The products were so good that my belief is that in the coming days, we will become number one in manufacturing and exports of electric vehicles, be it two-wheeler, cars or buses," Gadkari said.

So, he has requested the finance ministry to support the automobile industry for research and development of new technologies.