Car Scrapping System to Quadruple Automobile Industry Turnover

From yesteryear cartoon shows to the Breaking Bad episode where Walt and Jesse get their recreational vehicle destroyed, there have been plenty of junkyard references in western media; making us wonder why we don’t find many (read any) in India.

But there soon could be a car scrapyard system put in place in the country that could even quadruple the turnover of the automobile industry, owing to the incentives, within the next five years, believes union minister for road transport and highways Nitin Gadkari. 

”We will put the vehicle scrapping policy on a website within a week to seek suggestions and based on that we will seek Finance Ministry's approval. Once approved, it will be sent for the Cabinet nod,” Gadkari told PTI in an interview.

Gadkari detailed that under the incentive system, an excise rebate of 50 percent will be offered on new vehicles being bought by those who surrender cars that are more than a decade old. 

"We will set up industrial clusters near ports that will manufacture automobile parts at half the market rate. The labour cost in India is less. Car parts like copper, steel, plastic and aluminium would be available in plenty from old vehicles, which would be recycled at these clusters,” he said.

As a result of the ministry’s proposals, the turnover of the automobile industry is set to rise to Rs 20 lakh crore from it Rs 4.5 lakh crore-mark currently.

READ: What auto companies want for car scrapping

The government is also considering a financial incentive of up to Rs 1.5 lakh on surrender of vehicles that are over 10 years old to check pollution and address safety concerns.

Small vehicles will be offered an incentive of up to Rs 30,000 for those surrendering small vehicles while trucks could be in for total benefits worth Rs 1.5 lakh. 

No lesser than 8-10 industrial units, to give certificates for accepting old vehicles and recycle them, will be set up to impart a boost for employment generation and contributing to the economy.