Home / News / India /  ‘Vehicle scrapping will provide fillip to economy’: FM Sitharaman

Union Budget 2023: Finance Minister Nirmala Sitharaman on Wednesday hailed the “vehicle scrapping policy" of the central government which will help in the growth of automobile companies, and create employment opportunities. 

While presenting the last full budget of the current central government, FM Sitharaman said, “The decision to replace old government vehicles will provide a fillip to the Indian economy. This will translate into growing order books, increased output, and create job opportunities."

“Digital ecosystem for skilling to be further expanded, To empower our youth, realized their dreams we have formulated the national education policy, Centre to support states to scrap old vehicles," the minister announced. 

She also informed that this was done in India on a mass scale around 2008 after the Lehman brothers collapse.

Earlier on Monday, Union Transport Minister Nitin Gadkari said that about nine lakh government vehicles that are older than 15 years will go off-road from April 1, and new vehicles will be used. 

He said that the Central government is also taking many steps to facilitate the use of ethanol, methanol, bio-CNG, bio-LNG, and electric vehicle. 

"Now, we have approved the scrapping of more than nine lakh government vehicles, which are more than 15 years old, and polluting buses and cars will go off the road and new vehicles with alternative fuels will replace them. This will further reduce air pollution to a great extent," Gadkari said.

All state and Central government-owned vehicles including the buses owned by transport corporations and public sector undertakings that have been on the road for over 15 years will be scrapped.

However, there are some exceptions like special purpose vehicles (armored and other specialized vehicles) used for operational purposes for the defense of the country and for the maintenance of law and order and internal security, the notification had said. The rule shall not apply to this category.

"Disposal of such vehicles shall, after the expiry of 15 years from the date of the initial registration of the vehicle, (should) be ensured through the Registered Vehicle Scrapping Facility set up in accordance with the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021," it added.

The policy which provides for fitness tests after 20 years for personal vehicles and 15 years for commercial vehicles was announced in Union Budget 2021-22. Under the new policy which is effective from April 1, 2022, the Centre has said states and Union Territories will provide up to 25 per cent tax rebate on road tax for vehicles that are purchased after scrapping old vehicles.

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