The Finance Ministry has suggested putting the proposed policy before a Committee of Secretaries, the Road Transport and Highways Minister said after holding a meeting with Finance Minister Arun Jaitley on modernising the country’s vehicle fleet.
In order to check pollution, a new policy will be framed to make scrapping of 15-year old vehicles mandatory, bringing heavy vehiclesin its ambit to begin with, Union Minister Nitin Gadkari stated.
The Finance Ministry has suggested putting the proposed policy before a Committee of Secretaries, the Road Transport and Highways Minister said after holding a meeting with Finance Minister Arun Jaitley on modernising the country’s vehicle fleet.
“Finance Minister said that 65 per cent of the pollution is caused by heavy vehicles which have completed 15 years. We will scrap this in the first phase,” Gadkari told PTI.
“He has asked to make the policy for scrapping mandatory and not voluntary. The Finance Minister also said that instead of tax exemptions, provision of funds will be made in the budget,” he said.
Gadkari said Jaitley is of the view that policy will benefit both the central as well as state governments and lead to higher revenues.
The draft Voluntary Vehicle Fleet Modernisation Programme (V-VMP) policy had earlier proposed to bring under its purview vehicles bought on or before March 31, 2005, numbering about 28 million, to which the Finance Ministry has raised objections saying it would be difficult to provide exemption for such a large number of vehicles.
“The Finance Minister said if GST Council is formed then tax structure will change. So we will have to take permission from the GST Council. He asked to finalise the policy and Committee of Secretaries will discuss the same. Instead of asking for tax exemption he said he will provide incentive in the budget,” Gadkari added.
Also, he said, once the policy is finalised it will result in domestic steel scrap generation worth Rs 5,500 crore to substitute imported scrap. There would also be huge employment generation as there would be huge demand for workforce for scrapping/recycling operations and automobile manufacturing, he said.
“There are some concessions we are expecting from manufacturers and some from central government and we will fix the cost. We will make different automobile industrial clusters in different parts of the country and they may be near ports. That policy we will plan which will create more employment.”
The automobile industry’s turnover in the country is Rs 4.5 lakh crore, he said, adding that making these kind of industrial clusters will provide for a huge employment creation.
“Creating these kind of clusters it will reduce the cost of vehicles because spare part prices are reduced and we don’t need to import scrap from the world. Scrap will be available in the country including spares parts used in automobile industry,” he said.
Gadkari said that based on the success of first phase, the government will rollout the next phase. He said this could be a historic decision which will go a long way in controlling pollution.
The draft of the policy has proposed three incentives for the vehicles scrapped -half the regular excise duty at the time of purchase of the new car, fair value for the scrap and discounts from automobile manufacturers.
