Commercial vehicles over 10 years to go- Nitin Gadkari

The policy envisages tax exemptions and discounts totalling up to Rs 2.5 lakh on vehicles purchased for about Rs 10 lakh at the time of new purchase."We will form such a policy that more than 10-year-old vehicles will be scrapped. The cost of vehicle will be valued at 10 to 15 per cent of original cost. If vehicle cost is Rs 10 lakh, scrap will be 10 per cent of it," Gadkari told reporters on the sideline of a CII event.

He said the need to frame such a policy was felt on concerns of rising pollution in the country because of old vehicles which are based on old technology. Gadkari said: "Pollution is a big challenge for our country. Paris (Climate Conference) message is that we should pay attention to the environment."

When asked about banning CVs older than 15 years, he said: "An integrated policy to check pollution by over 10 year old commercial vehicle will be formed soon. Cabinet nod will be sought on it and only then it will come into force. There is no such decision at present to ban 15 years old commercial vehicles (CVs)."

Stating that "no policy can be in piecemeal without Cabinet approval", Gadkari said: "Whatever decision we will take, it will be based on integrated approach." He said such old vehicles will be valued at 10-15 per cent of the cost of the original vehicle at the time of purchase.

He said government will recommend some tax exemption so that neither manufacturer nor government is at loss. "Government will give tax exemption of Rs 50,000 to Rs 60,000. We are going to recommend it but have not declared the policy yet. Manufacturers will give Rs 50,000 to Rs 1 lakh discount to owner of old vehicle on new purchase, so that overall benefit will be up to Rs 2.5 lakh," Gadkari said.

The minister said such a step would result in spurt in automobile manufacturing which will go up by 25 per cent and government in turn will be benefited through more taxes. On tackling the huge amount of scrap generated through discarding of such a large number of vehicles, Gadkari said: "We will set up industrial zones at ports to recycle such scrap that would be marketed and immensely boost the economy."

The plan is to set up 8-10 industrial units near ports like Kandla which will not only give certificates for accepting old vehicles but would recycle vehicles from India and abroad and thereby give a boost to employment and economy.

"It is a very beneficial industry and would create huge employment," he said, adding that apart from domestic scrap, scrap from all over the world can be recycled there.