Gadkari: Owners will get 5% rebate on new car purchase for scrapping old

Automakers to be fined up to Rs. 1 Cr on mandatory recall
Image Credit: @nitin_gadkari

Car owners who scrap their old vehicles will get 5 percent rebated whenever they purchase a new one, Minister for Road Transport and Highways was quoted as saying in a media report.

This comes more than a month after an announcement about the vehicle scrappage policy made by the union finance minister Nirmala Sitharaman during budget 2021.

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“Automobile manufacturers will provide about 5 per cent rebate on new car purchases” to the consumers in lieu of scrapping of the old. There are four major components of the policy…Apart from rebate, there are provisions of green taxes and other levies on old polluting vehicles. These will be required to undergo mandatory fitness and pollution tests in automated facilities. For this automated fitness centres would be required throughout in the country and we are working in that direction,” Nitin Gadkari was reported as saying in a report.

According to the new scrappage policy, personal use vehicles will need to undergo a fitness test after 20 years, while the commercial vehicle will take this test after 15 years.

“This policy will result in an increase in vehicle demand which in turn would boost revenue. Also, ancillary industries would come up in large numbers thriving on junk vehicles,” he added.

“Structure and framework of scrapping policy is under work and green tax has already been notified. Many states have notified in ineffective way. We want to advise the state governments through notification under Motor Vehicles Act to consider imposing green tax on older vehicles which cause more pollution,” Road Transport and Highways Secretary Giridhar Aramane had said last month.

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