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The vehicle scrapping policy is likely to be finalized soon to boost the auto sector, Union Minister Nitin Gadkari said Thursday.
The Minister for Road Transport and Roads also said that his ministry has set a target to build roads worth £ 15 lakh crore in the next two years.
“The scrapping policy will be finalized soon. It will drive the industry. It will reduce the cost of production. Yesterday I also had a discussion with the Secretary and we will do it as soon as possible, ”said Mr. Gadkari in a video conference with members of the SIAM Institute (Society of Indian Automobile Manufacturers) about the impact of COVID-19 on the car. sector.
Finance Minister Nirmala Sitharaman said in February that a policy for scrapping old vehicles “is in process” and will be announced after the ministries concerned “tune it up.”
The long-awaited vehicle scrapping policy is awaiting final approval by the Union Cabinet, which will focus on eliminating the fleet of polluting old commercial vehicles on the country’s roads.
The proposed policy, once approved, will apply to all vehicles, including two- and three-wheelers. Previously, the policy was sent to a new round of stakeholder consultations on the direction of the Prime Minister’s Office (PMO).
Mr Gadkari had previously said that once the policy is approved, India could emerge as a hub for car manufacturing, as the key raw materials available from scrapping such as steel, aluminum and plastic are destined for to be recycled, which will reduce car prices by “20-30%”.
On July 26, 2019, the government had proposed amendments to motor vehicle regulations to allow scrapping of vehicles over the age of 15 in an attempt to stimulate the adoption of electric vehicles. In a draft notification, the government proposed renewing fitness certificates for vehicles older than 15 years every six months instead of the current one-year deadline.
The notification also stipulates that newly purchased motor vehicles will be exempt from the registration certificate fees and the assignment of a new registration mark, if the buyer presents a scrapping certificate of the second-hand vehicle of the same category issued by the authorized scrapping center / agency.
In May 2016, the government had submitted a draft of the Voluntary Vehicle Fleet Modernization Program (V-VMP) that proposed taking 28 million vehicles off the road from a decade ago.
Addressing SIAM members, Mr Gadkari said that for roads, he has set a goal of building roads worth £ 15 lakh crore in the next two years, adding that the pace of road construction has reached 30 km per day.
He also suggested exploring cheaper credits, including foreign capital, to improve liquidity in the auto manufacturing sector.
“We should look at foreign funds, pension funds, foreign banks, foreign agencies, the ADB World Bank … NHAI’s record is very good. We now have 480 bankable projects worth more than ₹ 4 lakh crore. These are economically viable projects and the internal rate of return is good, “he said.
“By adding the cost of acquiring land to projects, banks can finance them for 30 years,” the minister said, adding that he had a meeting with the RBI governor in this regard to allow financing of infrastructure projects for 30 years.
The minister suggested focusing on improving liquidity in business, saying that ups and downs are common, and urged the industry to make COVID-19 an opportunity to expand global market share.
He stressed that one must plan for the bad times while working for growth, adding that the industry should focus more on innovation, technology and research capacity to be competitive in the global market.
The minister said his ministry is working overtime to clear all arbitration cases with dealers.
On the issue of BS-IV vehicles, he said the government is bound by the Supreme Court’s verdict on it. However, at the suggestion of the industry, he will examine the matter again.
Regarding the relaxations sought in other regulations, Mr. Gadkari stated that he will strive to provide relief whenever possible where the industry is seeking an extension of time.
Mr. Gadkari answered the representatives’ questions and secured all possible government assistance. He reported that he would address the issues at the appropriate level in government and other departments.
The videoconference was also attended by the Minister of State for Road and Highway Transport V.K. Singh and Secretary, Road Transport and Giridhar Aramane Highways, among other senior officials.
During this interaction, members expressed their concern about the various challenges facing the industry in the midst of the COVID-19 pandemic along with some suggestions and requested government support to keep the sector afloat.
Mr. Gadkari urged them to work with commitment during these difficult times to win the coronavirus war and make India a super economic power.
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