New Delhi: 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 per cent 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 Rs 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 per cent 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 Rs 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.