Nitin Gadkari Said Older Cars Can Be Scrapped for New Ones at Great Discounts

Nitin Konde

Aug 28, 2024 — 2 min read

Nitin Gadkari Said Older Cars Can Be Scrapped for New Ones at Great Discounts

Manufacturers of both passenger and commercial cars have agreed to provide discounts for the purchase of new vehicles in exchange for the scrapping of older ones from purchasers who have a valid Certificate of Deposit, according to Nitin Gadkari, the Union Minister of Road Transport and Highways. This was revealed on 27 August 2024 by Gadkari.

The decision was reached during a meeting with the CEOs of the Society of Indian Automobile Manufacturers Association (SIAM), which was headed by the minister. The meeting aimed to address critical concerns facing the auto sector.

Gadkari informed on X, "I am pleased to report that several commercial and passenger vehicle manufacturers have agreed to offer discounts for the purchase of new vehicles against the scrapping of older vehicles with a valid Certificate of Deposit." Cleaner, safer, and more fuel-efficient cars will be driving down the road thanks to this program, which will propel our Circular Economy initiatives forward.

What Were the Earlier Offerings?

Earlier, customers who scrap their old vehicles to purchase a new one are likely to receive a discount of between 1.5 and 3.5% from India's leading automobile manufacturers.

The minister had stated the previous year that the nation requires a total of 1,000 centers for the scrapping of vehicles and 400 centers for the automated testing of fitness.

According to the minister, India has the potential to become a scrapping hub in South Asia. He made this statement while pointing out that the National Vehicle Scrappage Policy is beneficial to all parties involved. "Circular economy is very important and it is going to create jobs in the country," Gadkari opined.

National Vehicle Scrappage Policy

In August of 2021, Prime Minister Narendra Modi introduced the National Vehicle Scrappage Policy, stating that it would assist in the elimination of automobiles that were harmful to the environment and would also encourage the development of a circular economy.

Starting on April 1, 2022, the policy on the scrapping of vehicles went into effect. In accordance with the strategy, the Central Government has said that the states and Union Territories (UTs) will offer a tax credit of up to 25 percent on the road tax for automobiles that are purchased after the scrapping of older vehicles.

The policy, which was announced in the Union Budget 2021-22, stipulates that fitness tests would be conducted on commercial cars five years after the date of purchase, whilst the amount of time for fitness testing on personal vehicles has been set at twenty years.