Here's How Vehicle Scrappage Policy Can Help India's Economy and Automotive Sector

PM Narendra Modi today launched the much awaited vehicle scrappage policy in India today. Sale of New Vehicles The vehicle scrapping policy is not only expected to reduce environmental pollution and improve road safety by getting end of life and unfit vehicles off the road but also encourage sale of new vehicles through financial incentives in the form of vehicle registration charges and reduced road tax, thereby providing a fillip to the automobile industry. Job Creation In addition to reducing vehicular pollution and improving road safety, the vehicle scrapping policy is also likely to attract additional investments and generate employment through registered vehicle scrapping facilities, with around 50-60 such centers likely to be set up across the country. Boost state’s economy While the Vehicle Scrapping Policy is definitely a step in the right direction, its effective implementation would depend a lot on the States who would have to formulate supporting policies in areas like financial incentives for replacement vehicles in terms of waiver of registration charges, reduced road taxes as well as disincentives for end of life vehicles in the form of higher registration renewal charges & road taxes; facilitating development of industrial infrastructure and eco-system for setting up registered vehicle scrapping facilities as well as vehicle testing facilities. These include existing industrial infrastructure and eco-system for scrapping ships in Alang with requisite pollution management, effluent treatment systems which have the potential to reduce incremental investments in scrapping facilities; access to the Western coastline which could enable targeting imported vehicles from other countries for scrapping thereby providing economies of scale for an integrated scrapping facility; a vibrant automobile manufacturing industry which not only provides a ready market for materials recovered from scientific scrapping facilities but could also represent a potential investor base for vehicle scrapping facilities.