Nitin Gadkari says road ministry will make a presentation of vehicle scrap policy before the cabinet secretary on 9 February and then before the prime minister’s office

The draft Voluntary Vehicle Fleet Modernisation Programme (V-VMP) policy has proposed to bring under its purview vehicles bought on or before 31 March, 2005, numbering about 28 million. Sanjeev Verma/Mint

New Delhi: The government is keen on implementing vehicle policy that aims at scrapping 15-year-old commercial vehicles in the first phase, and it will send the proposal to Goods and Services Tax (GST) Council after cabinet nod, Union minister Nitin Gadkari said.

“We (ministry) will try to bring the policy as early as possible. We will make a presentation before the cabinet secretary on 9 February and then before the prime minister’s office (PMO). After the cabinet nod, a presentation will be made before GST Council,” road transport, highways and shipping minister Gadkari said.

Gadkari said that the PMO is keen on the proposal as once it is implemented pollution would be checked considerably as 65% of the pollution is caused by heavy vehicles which have completed 15 years. He said a presentation has already been made before the finance minister Arun Jaitley.

The proposal is to provide relief of about Rs5 lakh to people who purchase the new commercial vehicle of about Rs15 lakh, if they surrender their over 15-year-old commercial vehicles. “We propose a discount of about Rs2 lakh from manufacturers at the time of purchase while about Rs2.5 lakh concession in taxes by state and central governments for those purchasing new commercial vehicle on surrender of old,” Gadkari said, adding that tax concession would be based on GST Council decision.

Once the proposal is accepted, he said it is bound to result in Rs10,000 crore boost in tax revenue as the automobile sector will benefit from it. He said that the automobile sector is projected to grow by 22% and it will be a “win-win situation” for all.

The automobile sector turnover will grow from Rs4.5 lakh crore to Rs20 lakh crore after policy implementation, the minister said. He added that recycling units would be set up at industrial clusters under the government’s ambitious Sagarmala project and automobile parts made from scrapped aluminum, steel and copper, etc. would be cheaper.

The draft Voluntary Vehicle Fleet Modernisation Programme (V-VMP) policy has proposed to bring under its purview vehicles bought on or before 31 March, 2005, numbering about 28 million.