Scrap your old car, get new one at discount: Gadkari
What's the story
India's automobile manufacturers are set to offer a discount between 1.5-3.5% to customers who scrap their old cars and purchase new ones, according to Nitin Gadkari, Minister of Road Transport & Highways. This initiative will be applicable to both commercial and passenger vehicle buyers who hold a valid Certificate of Deposit (CD) for their scrapped vehicles. The announcement was made during a meeting with the Society of Indian Automobile Manufacturers (SIAM) in New Delhi.
Environmental impact
Initiative aims to promote cleaner and safer vehicles
Gadkari emphasized that this initiative is a significant step toward promoting a circular economy. The goal is to ensure that safer, cleaner, and more efficient vehicles are on Indian roads. He expressed his appreciation for the automobile manufacturers who have decided to participate in the Vehicle Fleet Modernization Programme (VFMP).
Discount details
Luxury carmakers may offer discounts up to ₹25,000
According to a report by The Times of India, some luxury carmakers have agreed to offer discounts of up to ₹25,000. However, others may set a maximum limit on the discount amount. These measures are expected to be officially announced today after years of discussion between the auto industry and the government.
Past efforts
Government's previous advisory on discounts was disregarded
In 2022, the Road Transport ministry had advised automobile associations to offer up to a 5% discount on new vehicles in exchange for scrapped ones. However, this suggestion was not implemented as the industry chose to negotiate a commercially viable discount instead. To note, voluntary vehicle scrapping has not gained significant momentum due to various reasons.
Scrapping progress
Over 1.2 lakh vehicles have been scrapped so far
So far, approximately 1.2 lakh vehicles have been scrapped at registered scrapping centers, with nearly 61,000 of these being government vehicles older than 15 years. The target is to scrap roughly 90,000 old government vehicles by March 2025. To further incentivize people, several states and Union Territories (UTs) have announced tax concessions and waivers on pending liabilities for cars offered for scrapping at these centers.