New Delhi: Union Minister for Road Transport Nitin Gadkari on Wednesday asked OEMs to offer more discounts on buying new vehicles after scrapping the old ones.
A discount of INR 50,000 to INR 1 lakh can be given for trucks or buses and the amount can be less for smaller vehicles, the minister said. This move can be an incentive to scrape vehicles, he said.
“My request to you—I do not want to make it mandatory because some companies are ready and some are not—is that you may give some discounts to persons who have scrapping certificates,” Gadkari said at the 62nd annual convention of Society of Indian Automobile Manufacturers (SIAM).
He also said that the road transport ministry and the steel ministry led by Jyotiraditya Scindia have approached the finance ministry to give GST concessions for such discounts. “So it can be a win-win situation for everyone,” Gadkari added.
Underlining the need of scrapping, he said pollution from an old truck is equal to that caused by 15 new trucks. “As per our record, 1.02 crore vehicles can presently be sent for scrapping. There are just 10-20 scrapping centers,” said Gadkari.
According to the Union Minister there is potential to start three scrapping centres in each district. “From such centres you will get copper, aluminum, steel, rubber and plastic, and you can reduce the costs of your components by 30%. People who scrap their vehicles will increase the auto companies’ “business by 25%-30%,” he added.
He also highlighted that the import of petroleum products has gone up to INR 16 lakh crore. “This is creating pollution problems and economic problems. The number of cars is increasing, leading to high congestion,” he said.
Reiterating the importance of localisation, Gadkari urged that the auto industry should make a list of items it is importing and do a study to find out how many of them can be locally manufactured.
“Import dependency is a big challenge to the industry. You should organize a workshop and find out the reasons for imports. What are your difficulties? And how can the government help in reducing imports?” he said.
The minister asked the industry to focus on making vehicles that have better quality and ensure safety.