The scrappage scheme for vehicles older than 15 years with incentives was announced by the government on Thursday. The scheme is expected to boost the automobile industry and attract investments of Rs 10,000 crore and create 35,000 job opportunities, Union minister of road transport and highways Nitin Gadkari said on Thursday.

While making a statement about the vehicle scrappage policy in the Lok Sabha, the minister termed it as a win-win situation and said, “The policy will help improve fuel efficiency and reduce pollution.”

Gadkari has also requested finance minister Nirmala Sitharaman to consider a GST cut for such vehicles. The finance ministry has not responded to the request yet.

“It will be an added incentive. The finance ministry is looking into this request but there is no decision yet… The GST income will also rise by Rs 30,000 crore–Rs 40,000 crore on account of higher vehicle sales.”

“The headwinds for implementation would be in the form of having more infrastructure in place to build organised scrapping centres, which India does not possess,” Care Ratings said.

V.R. Sharma, MD of JSPL, said: “The country should have a uniform power tariff for the vehicle scrappage to be cost effective and for such centres to come up across the country, otherwise vehicles would move to lower tariff states such as Odisha and Chhattisgarh, which would defeat the purpose.”

“India has 51 lakh light motor vehicles which are older than 20 years, 34 lakh light motor vehicles which are older than 15 years, and 17 lakh medium and heavy commercial vehicles which are older than 15 years and without valid fitness certificates,” Gadkari said.

FASTag

Gadkari informed the Lok Sabha that the government is looking to do away with toll booths in the next year, which will be replaced with GPS imaging-based toll collection. FASTag has been made mandatory for all vehicles, and double toll is levied if a vehicle does not have FASTag.

“I want to assure the House that within one year all physical toll booths in the country will be removed...The toll will be collected based on GPS imaging (on vehicles)," Gadkari said.