Several commercial vehicle and passenger vehicle makers will start giving discounts to consumers who purchase new vehicles after scrapping their old vehicles, according to the Minister for Road Transport and Highways Nitin Gadkari.
“I am pleased to report that, in response to my recommendation, several commercial and passenger vehicle manufacturers have agreed to offer discounts for the purchase of new vehicles against the scrapping of older vehicles with a valid Certificate of Deposit,” he said on X today.
Gadkari’s social media post came after chairing a delegation of CEOs of the Society of Indian Automobile Manufacturers today in Delhi. “This initiative will significantly advance our Circular Economy efforts, ensuring that cleaner, safer, and more efficient vehicles are on our roads,” he noted.
In 20222, the government introduced the Voluntary Vehicle-Fleet Modernisation Programme, or Vehicle Scrapping Policy, to support vehicle scrapping through incentives and infrastructure in the form of automated testing stations and registered vehicle scrapping facilities.
On depositing the vehicle for scrapping at registered scrapping facilities, the vehicle owner gets a Certificate of Deposit, which is tradable. It can be used for multiple benefits, such as registration fee waivers, road tax concessions, and discounts from automakers on the purchase of new vehicles. The policy has notified state governments to offer a concession on motor vehicle tax of up to 25% for non-transport vehicles, and up to 15% on transport vehicles.
Recently, SIAM President Vinod Aggarwal said the scrappage policy has not seen much impact and expects something from the government to give a further push for the scrappage of old vehicles.
There are around 100 registered scrapping facilities across the country. Automakers, including Maruti Suzuki, Tata Motors, and Mahindra & Mahindra have set up scrapping facilities in multiple locations.