On Tuesday, Union Minister of Road Transport and Highways Nitin Gadkari announced a new initiative aimed at modernizing India’s vehicle fleet. During a meeting with the Society of Indian Automobile Manufacturers Association (SIAM) CEOs, Gadkari revealed that both passenger and commercial vehicle manufacturers have agreed to offer discounts on new vehicle purchases for buyers who scrap their old vehicles and present a valid Certificate of Deposit. This initiative is part of the National Vehicle Scrappage Policy, which seeks to promote a circular economy by encouraging the replacement of older, less efficient vehicles with newer, cleaner models. Gadkari highlighted that this policy will advance efforts towards a Circular Economy, making roads safer and more efficient. Manufacturers are expected to provide discounts ranging from 1.5 to 3.5 percent to buyers participating in the Vehicle Fleet Modernisation Programme. The policy aims to phase out vehicles that are more than 15 years old for commercial use and 20 years old for personal use, as these vehicles contribute significantly to pollution. Prime Minister Narendra Modi launched the National Vehicle Scrappage Policy in August 2021, which came into effect on April 1, 2022. The policy includes provisions for fitness tests of vehicles and offers up to a 25 percent road tax rebate in states and Union Territories for those purchasing new vehicles after scrapping old ones. Gadkari also emphasized the importance of establishing 1,000 vehicle scrapping centers and 400 automated fitness test centers to support the policy, noting that India has the potential to become a leading scrapping hub in South Asia, creating numerous job opportunities.
