Vehicle scrap policy soon; roads building worth Rs 15 trn in 2 yrs: Gadkari

The vehicle scrappage policy is likely to be finalised soon to boost the automobile sector, Union Minister Nitin Gadkari said on Thursday.

The road transport and highways minister also said that his ministry has fixed a target to build highways worth Rs 15 trillion in the next two years.

"The scrapping policy will be finalised soon. It is going to boost the industry. It is going to reduce the production cost. Yesterday also, I had a discussion with the Secretary and we will make it as early as possible," Gadkari said in a video conference with the members of SIAM (Society of Indian Automobile Manufacturers) Institute over impact of COVID-19 on the automobile sector.

Finance Minister Nirmala Sitharaman in February had said that a policy for scrapping of old vehicles "is in the works" and will be announced after concerned ministries "fine tune" it.

The much-awaited vehicle scrappage policy is awaiting final clearance from the Union Cabinet, which will focus on eliminating the fleet of old polluting commercial vehicles plying on the country's roads.

The proposed policy, once approved, will be applicable on all vehicles including two and three-wheelers. Earlier, the policy was sent for a fresh round of consultation with stakeholders on the direction of the Prime Minister's Office (PMO).

Gadakri had earlier said that once the policy is approved, India could emerge as a hub for automobile manufacturing as key raw material available from scrapping like steel, aluminium and plastic are bound to be recycled, bringing down automobile prices by "20-30 per cent".

The government on July 26, 2019 had proposed amendments to motor vehicle norms to allow scrapping of vehicles older than 15 years in a bid to spur adoption of electrical vehicles. In a draft notification, the government proposed renewal of fitness certificates for vehicles older than 15 years every six months instead of the current time-frame of one year.

The notification also provided that the newly purchased motor vehicles will be exempted for payment of fees for registration certificate and assignment of new registration mark, if the purchaser produces scrapping certificate of the previously-owned vehicle of the same category issued by the authorised scrapping centre/agency.

In May 2016, the government had floated a draft voluntary vehicle fleet modernisation programme (V-VMP) that proposed to take 28 million decade-old vehicles off the road.

Addressing SIAM members, Gadkari said for highways, he has set a target of building Rs 15 lakh crore worth of roads in the next two years and added that the road construction pace has reached 30 km a day now.

He also suggested exploring cheaper credits, including foreign capital for enhancing liquidity in the automobile manufacturing sector.

"We should look at foreign funds, pension funds, foreign banks, foreign agencies, World Bank ADB.... NHAI track record is very good. Now we have 480 bankable projects worth more than Rs 4 lakh crore. These are projects which are economically viable and the internal rate of return is good.

"By adding land acquisition cost to the projects the banks can finance these for 30 years," the minister said, adding that he had a meeting with the RBI governor in this regard for permitting finance to infrastructure projects for 30 years.

The minister suggested to focus on enhancing liquidity in business saying ups and downs are common and urged the industry to convert COVID-19 into an opportunity of expanding global market share.

He stressed that one needs to plan for bad times while working for growth, and added that the industry should focus more on innovation, technology and research skill to become competitive in global market.

The minister said his ministry is working overtime to clear all arbitration cases with concessionaires.

On the question of BS-IV vehicles, he said the government is bound by the Supreme Court verdict on the same. However, on industry suggestion, he will get the matter examined afresh.

Regarding relaxations sought on other regulations, Gadkari stated that he will endeavour to provide relief wherever possible where industry is seeking extension of time.

Gadkari responded to the questions from representatives and assured all possible help from the government. He informed that he would take up the issues at the appropriate level in the government and other departments.

The video conference was also attended by the Minister of State for Road Transport and Highways VK Singh and Secretary, Road Transport and Highways Giridhar Aramane, among other senior officials.

During this interaction, members expressed concerns regarding various challenges being faced by industry amid COVID-19 pandemic along with few suggestions and requested support from the government to keep the sector afloat.

Gadkari urged them to work with commitment during these challenging times to win the Corona war and make India super economic power.