Gadkari Pitches for Additional Discount to Vehicle Buyers Submitting Scrappage Certificate

Union Minister Nitin Gadkari on Thursday urged the automobile industry to consider offering additional discounts to customers who submit a scrappage certificate while buying a new vehicle.

The Road Transport and Highway Minister also said that he has requested Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman to give GST relief to those buying a new vehicle after scrapping their old vehicle.

The minister also hit back at the campaign against the E20 fuel (20% ethanol blended petrol), saying the campaign was politically motivated against him.

"This social media campaign was a paid campaign. It was against ethanol, and it was to target me politically," he said, speaking here at the annual convention of the Society of Indian Automobile Manufacturers (SIAM).

Opposition Congress recently levelled conflict of interest allegations against Gadkari, claiming that he has been "aggressively lobbying" for ethanol production while his two sons are involved in firms that produce ethanol and "benefited" from the government policy.

On the vehicle scrappage policy, Gadkari said it was a "win-win" for both industry and the government, as this could help the private sector also with the availability of scrap metals, which are imported.

The automobile industry is "still not fully listening to me" on this, the minister said, adding that it is for the benefit of the industry.

"If you will give some discount to those who will scrap the vehicle, to buy a new vehicle, then your turnover will increase a lot," he said, adding, "The government will also get GST. And the pollution of the country will be reduced. So you should definitely contribute to this." The minister asked the industry to consider offering "good discounts" to those buying a new vehicle after submitting a scrap certificate of the old vehicle.

He said that at present, an average of 16,830 vehicles are being scrapped monthly, and the private sector has invested ₹2,700 crore.

"The steel scrap that we import into our country is 60 lakh tonnes. And apart from this, the very important metals, due to which there is a shortage, which you have to bring from outside, can also get from scrapping," he said.

Gadkari added that only 6% of aluminium has been made available through imports.

"If all vehicles are scrapped, then through GST, the new additional vehicles that people will buy will benefit the state governments and the Indian government by ₹40,000 crore," he said.

The automobile industry will also benefit from the additional demand which will be created after scrapping.

"So, looking at both these win-win situations, if you support the scrapping certificate in some of the incentives, then I think it will take our country and this industry forward, and your production cost will be reduced," he said.

Moreover, scraps will be recycled, creating 70 lakh additional jobs. Through scraps, metals such as steel, lead, aluminium, platinum, palladium, etc, will be obtained from it.

Further, Gadkari said he has requested the Prime Minister to provide some GST relief to those consumers who buy a new vehicle after getting their old vehicle scrapped.

"A day before yesterday, I requested the Prime Minister and the Finance Minister to increase scrapping, vehicles that will be scrapped, and new vehicles will be bought, so we can think about GST (reduction). So think about it. We have also put this in front of the Finance Minister," he said.

On concerns about ethanol-mixed E20 fuel expressed by experts and consumers, the minister said there is no truth in it and everything has been clarified. Ethanol helps cut imports, and is cost-effective, pollution-free and indigenous, he added.

"Farmers will benefit by ₹45,000 crore. Our agricultural growth rate is very low. So, this diversification of agriculture towards the energy and power sector is not wrong for the benefit of farmers," said Gadkari.

On air pollution from vehicle emissions, he said India, which directly jumped from BS IV to BS V, will maintain its "global alignment for adoption of BS7 norms".

"We will go along with the international standards - the European standards. We will not go beyond that," he said.

He also raised his concerns over road safety and said there are 5 lakh accidents and 1.8 lakh deaths, in which 66% are from the 18-34 age group.

According to the minister, the auto industry has benefited a lot from the reduction of duty in the recent GST rationalisation and assured support to the industry.

"The Indian auto industry has now become number 3 in terms of size, and I believe in the capability of all of you, that if all of us work together, then we can go to number 1 in the world in the automobile sector," he added.