The long-anticipated scrappage policy is set to get the cabinet's approval as soon as March 2020. Speaking at the Federation of Automobile Dealers Association's (FADA) 11th Auto Summit 2020, Union Minister of Road Transport and Highways, Nitin Gadkari announced, "Our scrappage policy is in its final stage right now and we are awaiting the cabinet's approval." Sharing the timeline Gadkari added, "The cabinet is likely to approve the policy in next 15 days to a month." This comes as a piece of big news for the automotive industry, which has been waiting for a proper scrappage policy for almost three years now.
Now, the government has been mulling over the plan to not allow re-registration old vehicles that are more than 15-years old, which means they cannot ply on the roads. But that also raised the question as to what will happen to these old vehicles? And a proper and effective scrappage policy was the answer to that. The Society of India Automobile Manufacturers (SIAM) had asked the government to come up with an incentive-based scrappage policy. SIAM said that a proper scrappage policy will ensure the withdrawal of old and polluting vehicles from the road along with giving a flip to the sales of new vehicles which are comparatively eco-friendly and safer.
Satyakam Arya, MD and CEO of Daimler India Commercial Vehicles had earlier mentioned that scrappage policy plays an important role in not just pollution control by automobiles, but also help the industry in this economic slowdown.
In his speech, Gadkari also talked about the idea of using the upcoming scrapping facility for not just Indian vehicles, but also old scrapped vehicles from other countries. The Union Minister said that the Kandla port in the Kutch District of Gujarat, where they have built an 80-metre draft, could be used for this purpose. This would help both the automotive and other industries in India to recover important metals and reduce manufacturing and import cost.
A lot of Indian OEMs has come forward with the plan to set up scrappage facilities in the country. Home-grown utility vehicle and electric vehicle manufacturer Mahindra has already set up one such centre in India, while Toyota-Suzuki has announced their intent to open a similar facility in Gujarat soon.