After the dark clouds of Covid-19 pandemic induced lockdown, there could be some good news coming on the Indian automotive industry’s way, as per the report.
Vehicle Scrappage Policy
It seems that the much-delayed Vehicle Scrappage Policy could finally get a green signal from the government.
The news was confirmed by the Union Minister for Road Transport & Highways, Nitin Gadkari while speaking at the recent ‘Atmanirbhar Bharat Innovation Challenge 2020-21’ event.
According to him, the Prime Minister’s Office will provide the final approval for the scrappage policy.
Further, this policy should stimulate the auto industry and help remove old polluting cars.
Since the contribution to pollution levels from older vehicles can be disproportionately high, hence these steps need to be taken by the government.
Prior to this, on July 26, 2019, the government has proposed amendments to existing motor vehicle norms to allow scrapping of vehicles older than 15 years.
The move is to stimulate the adoption of electric vehicles and also reduce pollution levels.
“We have submitted the proposal and I am expecting that we will get approval as early as possible for the scrapping policy,” Gadkari said.
Although, the final call will be taken by the Prime Minister’s Office, which had earlier sent the proposed policy for a fresh round of consultation with stakeholders.
Growth Acceleration With Vehicle Scrappage
Vehicle scrappage is simply getting rid of old cars which are the polluting vehicles from the road.
In simple words, a vehicle scrappage policy is mandated by a government to accelerate the replacement of old, polluting vehicles by new vehicles.
These kinds of policies are already adopted by a number of developed markets.
They come with dual gains, on one side they stimulate the domestic automobile and automotive industry.
On the other side, they remove inefficient, polluting vehicles from the road, hence paving a path for greener motoring and cleaner air.
Opportunity For Organised Scrappage And Recycling Industry
If this policy gets a green signal, over 28 million end-of-life vehicles or ELVs (older than March 31, 2005) across categories were ready to be discarded by April 2020, as per the government estimates.
Obviously, it would translate to a massive opportunity for players in the organized scrappage and recycling industry.
So far, it is important to prioritize the scrappage of old heavy-duty vehicles and replace them with BS-VI vehicles.
If a stimulus package is provided to the personal vehicles like two-wheelers and cars, then the public incentive program along with voluntary incentives from the industry should be linked with electric vehicles.
Which is necessary to stay on course to meet the target of 30-40 percent electrification of the fleet by 2030.
So, we can say that a vehicle scrappage policy will be good news for the Indian automobile industry.
Let us see when it will be announced officially.
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