Road Transport and Highways Nitin Gadkari said on Thursday said that the vehicle scrapping policy which is being given the finishing touches will be a "win-win" policy that will help improve fuel efficiency and reduce pollution.

Making a statement in the Lok Sabha, the minister said the policy will also lead to an increase in the country's automobile industry turnover to Rs 10 lakh crore from the current Rs 4.5 lakh crore. GST collections will also rise due to the purchase of new vehicles, he added.

Announced in the 2021-22 Union Budget, the policy provides for a fitness test after 20 years for personal vehicles, while for commercial vehicles the time span is of 15 years. These old vehicles will have to be scrapped if they do not clear the fitness test. A higher fee will be charged for the old vehicles to be registered again.

Rebate on new vehicles

The minister has also issued an advisory to automakers, advising them to provide an incentive of a five per cent rebate for those buying a new vehicle after producing a scrapping certificate.

He said the policy is aimed at reducing the population of old and defective vehicles, bringing down vehicular air pollutants and improving road and vehicular safety.

Recycling materials

Besides, it will help in achieving better fuel efficiency and boost the availability of low-cost raw materials for the automotive, steel and electronics industry through an organised vehicle scrapping industry.

With the scrapping of old vehicles, raw materials such as plastic, copper, aluminium, steel and rubber will be recycled. This will bring down the cost component and help the industry become more cost-competitive.

The Road Transport and Highway Ministry will publish a draft notification for stakeholders' comments in the next few weeks.

The minister said that there are 51 lakh light motor vehicles that are older than 20 years and 34 lakh light motor vehicles that are older than 15 years.

Around 17 lakh medium and heavy commercial vehicles are older than 15 years without a valid fitness certificate, he said, adding that older vehicles pollute the environment 10 to 12 times more than fit vehicles.