Budget 2021: FM proposes voluntary vehicle scrappage policy to phase out old automobiles

Feb 1, 2021

By: Navdeep Yadav

At the Union Budget 2021 today, the FM said details of a scrappage policy would be announced separately.

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The policy will urge vehicle owners to scrap their old vehicles

Cars older than 20 years and commercial vehicles older than 15 years will be eligible for retirement.

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The policy claims to bring ₹43,000 cr business opportunity by boosting consumption in the industry.

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The government will offer

Financial or tax-based benefits to consumers who choose to scrap their old vehicle and purchase new vehicles.

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Move to boost auto demand

When implemented, the policy is expected to increase production and capacity utilisation of vehicles

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This was among one of the top demands of the auto industry ahead of the Budget.

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Union minister Nitin Gadkari earlier said…

A vehicle scrappage policy will give a major push to the country's automobile manufacturing industry

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It would be a good way to avoid any financial burden on the government as well as reduce emissions.

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Investor cheer: BSE Auto Index jumped nearly 200 points right after the announcement

M&M, Maruti and Escorts were the top gainers — with stocks soaring nearly 2 percent.

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