The policy will envisage the scrapping of 10-year-old vehicles, which will be valued at 10-15 per cent of the original cost.
It will also consider tax exemption by government and discounts by manufacturer so that owner of old vehicle gets an overall benefit of up to Rs 2.5 lakh on a new purchase.
Highlighting the need to frame a such a policy, Gadkari said: "Pollution is a big challenge for our country. Paris (Climate Conference) message is that we should pay attention to the environment."
Stating that "no policy can be in piecemeal without Cabinet approval", Gadkari said: "Whatever decision we will take, it will be based on integrated approach."
Also Read
Elaborating how the government plans to tackle the issue, he said: "We will form such a policy that 10-year-old vehicles will be scrapped. The cost of vehicle will be valued at 10 to 15 per cent of original cost. If vehicle cost is Rs 10 lakh, scrap will be 10 per cent of it."
"Government will give tax exemption of Rs 50,000 to Rs 60,000. We are going to recommend it but have not declared the policy yet. Manufacturers will give Rs 50,000 to Rs 1 lakh discount to owner of old vehicle on new purchase, so that overall benefit will be up to Rs 2.5 lakh," Gadkari said.
The minister said such a step would result in 25 per cent increase in automobile manufacturing.
(REOPENS BOM10)
Gadkari also inaugurated today the Vajedu Bridge at Madikonda near Warangal.
He sanctioned construction of a National Highway from Bhadrachalam in Khammam district to Koutala in Adilabad district.
"The Central government is planning to lay the foundation stone for as many as 350 Rail Overbridges (ROBs) in the country, on one single day before the upcoming Republic Day. Twelve of those would be in Telangana," he said.
Telangana Chief Minister K Chandrashekar Rao requested the Union Minister to take necessary steps to resume the cement industry in Hyderabad.
The state government has proposed a Textile Park in Warangal, Rao said, adding it is the state's second-largest city and the most important one after Hyderabad.
Telangana Deputy Chief Minister K Srihari presided over the programme.
Rao would be halting at Hanamakonda in Warangal tonight and tomorrow.
He would inaugurate the Kakatiya Thermal Power Station Stage-II, with an installed capacity of 600 MW, at Bhupalpally near Warangal tomorrow.