Vehicle Scrappage Policy boosts demand for New Vehicles
Reportedly long-delayed and much-awaited vehicle scrappage policy may receive an impetus in the times to come with Road Transport and Highways minister nitin gadkari informing on thursday that it will be of immense benefit to the domestic automobile sector which is currently reeling from the effects of a national lockdown to check spread of Covid-19 disease.
The vehicle scrappage policy currently awaits a clearance from the Finance Ministry and Gadkari, in a video conference with Society of indian Automobile Manufacturers (SIAM), said he is confident that all creases would be ironed out in a speedy manner. "I have been trying to pursue the scrapping policy for the last two years. We need cooperation from other ministries, stakeholders. Have told the secretary to follow it up as soon as possible. This is one of the steps to boost the industry," he said.
The vehicle scrappage policy takes aim at old polluting vehicles on indian roads and looks at confining them to the scrapyard. With resale value of vehicles beyond 15 years being extremely low, these vehicles can be sent to scrapyards with some sort of monetary compensation to owners which could ensure two benefits - incentive for owners to get rid of such vehicles and putting these polluting vehicles out to help the environment. There could, however, be other equally important benefits like such owners then going to the market for new vehicles which could boost demand, and re-using the scrap materials like steel and aluminum for manufacturing new vehicles.End of Life vehicles are taken to scrapyards where machines like shredders are used to reduce them to small parts, some of which are then recycled. The challenge may be to define the set process and to get rid of parts which cannot be used once again in an environment-friendly manner.