Gadkari bats for more discounts for car buyers submitting scrap certificates

Union Minister of Road Transport and Highways, Nitin Gadkari, on Thursday (September 11) urged the automobile industry to consider offering additional discounts to customers who submit a scrap certificate while purchasing a new vehicle.

Speaking at the annual convention of the Society of Indian Automobile Manufacturers (SIAM), he said that the practice of scrapping cars and the incentives for customers who scrap their cars would boost employment and reduce reliance on imports of metals such as steel.

Gadkari also stated that he had already requested Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman to give GST relief to such customers. "The day before yesterday, I requested the prime minister and the finance minister to increase scrapping, because when old vehicles are scrapped, new vehicles are purchased. Then we can consider a GST reduction," he said.

Win-win situation for all

Gadkari said the vehicle scrappage policy would benefit both the auto sector and the government. He also said that this could help the private sector with the availability of scrap metals, which are generally imported.

"If you will give some discount to those who will scrap the vehicle, to buy a new vehicle, then your turnover will increase a lot," he said.

"The government will also get GST. And the pollution of the country will be reduced. So you should definitely contribute to this," he said while expressing that the auto sector was not completely heeding his idea of implementing the scrappage policy.

Also Read: Govt, auto industry should work together to achieve self-reliance: Modi

How scraps can help India

Gadkari asked the industry to consider offering "good discounts" to those buying a new vehicle after submitting a scrap certificate of their old vehicles. He further detailed how encouraging the scrapping would actually benefit the country.

According to Gadkari, on average, 16,830 vehicles are scrapped every month. The private sector has invested Rs 2,700 crore in the industry. India imports 60 lakh tonnes of steel scrap. Apart from this, India depends on imports for other metals as well. "Due to the shortage, you have to bring these metals from outside. However, these metals, such as steel, lead, aluminium, platinum, palladium, etc, could be obtained from scrap," he stated, adding that this practice would create 70 lakh additional jobs.

"If all vehicles are scrapped, then through GST, the new additional vehicles that people would buy would benefit the state governments and the Indian government by Rs 40,000 crore," he said. The automobile industry would also benefit from the additional demand that would be created after scrapping.

"If you include the scrapping certificate in your incentives, it will take the country and the industry forward, and your production costs will come down," he said.

Also Read: GST 2.0 negates net impact on GDP growth caused by Trump’s tariffs: CEA

Row over ethanol-mixed E20 fuel

The Congress recently levelled allegations against Gadkari, claiming that he had been "aggressively lobbying" for ethanol production while his two sons were involved in firms that produce ethanol and "benefited" from the government policy.

While hitting back at the campaign against Ethanol mixed fuel (20 per cent ethanol-blended petrol), he said that it was "politically motivated" against him.

"This social media campaign was a paid campaign. It was against ethanol, and it was to target me politically," he said.

On concerns about ethanol-mixed E20 fuel expressed by experts and consumers, the minister said there is no truth in it, and everything has been clarified. Ethanol helps cut imports, and is cost-effective, pollution-free, and indigenous, he added.

"Our agricultural growth rate is very low. So, this diversification of agriculture towards the energy and power sector is not wrong for the benefit of farmers," Gadkari said, adding that the farmers will benefit by Rs 45,000 crore.

India moving towards BS7 norms

On air pollution from vehicle emissions, he said India moved from BS IV to BS V and will maintain its "global alignment for adoption of BS7 norms". He also said that the nation is going along with international standards.

While talking about road safety, he said there were 5 lakh accidents and 1.8 lakh deaths, 66 per cent of which involved people aged 18-34.