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Discount Discussions Against Scrapped Vehicles With Finance Ministry In Works: Nitin Gadkari The minister said during the scrapping process, the cost of raw materials for the automotive industry was reduced by 33%, while sales increased by 10%-12%

By Teena Jose

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Nitin Gadkari Twitter handle

Union road transport and highways minister Nitin Gadkari, at a gathering of automotive industry stakeholders at the inauguration ceremony of Auto Expo 2023 on Thursday, said that he has held discussions with the finance ministry for offering discounts to incentivize voluntary scrapping of end-of-life vehicles.

Gadkari said that the finance minister has talked about the importance of building a circular economy in her economic policy.

While asking the auto sector for assistance on the scrapping front, Gadkari said in a statement that, "During the scrapping process, the cost of raw materials for the automotive industry was reduced by 33%, while sales increased by 10%-12%. Additionally, because people who are going to junk their car are going to buy a new one, your turnover will rise."

He also suggested the auto companies offer discounts to buyers of new cars who present their scrappage credentials. "We are trying to get a discount from the finance ministry, but I request automotive manufacturers to give some discount for purchases against a scrapped vehicle. If you can offer a discount, it will be advantageous for you because it will boost your sales and earnings," the minister said in the statement.

As per Gadkari's words, it is possible to repurpose metals and semiconductors from scrapped vehicles, which will lower the price of finished goods. The minister highlighted that now is the moment to cut back on fossil fuel imports and EV exports, citing the rate of air pollution in the country.

In his inaugural address, Gadkari further emphasized that the government's goal is to cut down on accidents by 50% by the end of 2024, as he requested the auto industry to take suo moto action for road safety as the government doesn't want to make anything mandatory.

As per earlier reports, in September 2021, Gadkari had suggested the EV manufacturers give discounts to EV buyers who had scrapped their old IC-engine cars. The minister then visualized that indigenous low-cost battery technology, localisation of EV components and huge domestic demand would make EV one of the most affordable means of transportation in the future.

Furthemore, in September 2022, Gadkari had asked OEMs to give more discounts on buying new vehicles after scrapping the old ones. According to him, a discount of INR 50,000 to INR 1 lakh can be given for trucks or buses and the amount can be lesser for smaller vehicles.

Teena Jose

News Desk Reporter with Entrepreneur India

Teena is a post graduate in financial journalism. She has an avid interest in content creation, digital media and fashion.

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