Jaitley wants old vehicles junked

New Delhi, August 24 

To check pollution, a new policy will be framed to make scrapping of 15-year-old vehicles mandatory, bringing heavy vehicles in its ambit to begin with, Union Minister Nitin Gadkari today said.

The Finance Ministry has suggested putting the proposed policy before a committee of Secretaries, the Road Transport and Highways Minister said after meeting Finance Minister Arun Jaitley on modernising the country’s vehicle fleet.

“The Finance Minister said 65 per cent of pollution is caused by heavy vehicles which have completed 15 years. We will scrap this in the first phase,” Gadkari said.

“He has asked to make the policy for scrapping mandatory and not voluntary. The Finance Minister also said that instead of tax exemptions, provision of funds will be made in the Budget,” he said.

Gadkari said Jaitley is of the view that policy will benefit both Central as well as state governments and lead to higher revenues.

The draft Voluntary Vehicle Fleet Modernisation Programme (V-VMP) policy had earlier proposed to bring under its purview vehicles bought on or before March 31, 2005, numbering about 28 million, to which the Finance Ministry has raised objections saying it would be difficult to provide exemption for such a large number of vehicles.

“The Finance Minister said if GST Council is formed then tax structure will change. So, we will have to take permission from the GST Council. He asked to finalise the policy and Committee of Secretaries will discuss the same. Instead of asking for tax exemption, he said he will provide incentive in the Budget,” Gadkari added.

Asked as to how the ministry proposes to incentivise the people opting for scrapping of vehicles, Gadkari said: “Suppose we give tax exemption for Rs 75,000, they (Finance Ministry) are saying we will give that amount to the person who scraps his vehicle. Don’t ask for exemption in tax.”

Gadkari said he briefed the Finance Minister of the possible allied benefits of the V-VMP policy that included “additional net revenue of over Rs 21,000 crore” on account of additional automobile sales, besides crude oil savings of Rs 7,700 crore due to improved fuel efficiency.

Also, he said, once the policy is finalised, it will result in domestic steel scrap generation worth Rs 5,500 crore to substitute imported scrap.

There would also be employment generation as there would be demand for workforce for scrapping/recycling operations and automobile manufacturing, he said. — PTI