People opting for scrapping should get discount on new vehicles: Gadkari

Auto companies will see business increasing by 25-30 per cent thanks to scrapping, says minister

People scrapping their old vehicles increase the revenues of auto companies and should get discounts for new purchases, said Minister for Road Transport and Highways Nitin Gadkari on Wednesday.

“My request to you—I do not want to make it mandatory because some companies are ready and some are not—is that the persons who have scrapping certificates, if you can offer them some discounts,” he said at the 62nd annual convention of Society of Indian Automobile Manufacturers (SIAM).

A discount of Rs 50,000-Rs 1 lakh can be given for big vehicles like trucks or buses and the amount can be less for smaller vehicles, he said, adding it “can be an incentive to get vehicles scrapped”.

Gadkari said he and Steel Minister Jyotiraditya Scindia have approached the Finance Ministry to give GST concessions for such discounts. “So it can be a win-win situation for everyone.”

Pollution from an old truck is equal to that caused by 15 new trucks and therefore scrapping is important. “As per our record, 1.02 crore vehicles can presently be sent for scrapping. There are just 10-20 scrapping centers,” said Gadkari.

There is potential to start three scrapping centers in each district. “Because of scrapping centers, you will get copper, aluminum, steel, rubber and plastic, and you can reduce the costs of your components by 30 per cent.”

People who scrap their vehicles will increase the auto companies’ "business by 25-30 per cent", he said.

“The import of petroleum products has gone up to Rs 16 lakh crore. This is creating pollution problems and economic problems. Number of cars is increasing, leading to high congestion,” he mentioned.

The auto industry should make a list of items it is importing and do a study to find out how many of them can be locally manufactured, he said.

“Import dependency is a big challenge to the industry. You should organize a workshop and find out the reasons for imports. What are your difficulties? And how can the government help in reducing imports?” he said.

He asked the industry to focus on making vehicles that have better quality and safety.