Modi Sees $1.3 Billion Investment From ‘Cash-For-Clunkers’ Plan
Modi, speaking at a virtual investor summit in Gujarat, also gave more details of India’s so-called scrappage policy.
(Bloomberg) -- India’s plan to remove millions of gas-guzzling cars and fume-belching trucks and buses from roads should attract new investment of more than 100 billion rupees ($1.3 billion), according to Prime Minister Narendra Modi.
Modi, speaking at a virtual investor summit on Friday in Gujarat, also gave more details of India’s so-called scrappage policy that was first announced in the Feb. 1 budget, saying people who hand in their old cars for recycling won’t have to pay the registration fee on a new vehicle and will get a discount on their road tax.
Vehicle scrapping units and authorized automated testing centers will also be built across the country, Modi said, although he didn’t specify where the fresh investment would come from.
“India is progressing toward clean, congestion-free and convenient mobility because it’s the need of the hour,” Modi said. “This program will give a big boost to auto and metal industries. This policy is key for the waste-to-wealth campaign and circular economy. It shows our commitment to reduce pollution.”
It’s crucial for India to get rid of polluting vehicles to curb the nation’s bad air, which rates as some of the least clean in the world. Air pollution costs the country 8.5% of its gross domestic product, according to the World Bank. The Centre for Science and Environment forecasts that by 2025, India will have as many as 20 million old vehicles nearing the end of their lives, which will cause huge environmental damage.
Scrapping old vehicles will also reduce India’s dependency on other nations for metals. Last year India imported 230 billion rupees of steel scrap because “scrapping in India is not productive, energy recovery is almost nothing and the precious metals are not being recovered,” Modi said. He said this new policy will also help to recover rare earth metals.
“We’re trying our best to reduce imports as much as possible for the auto manufacturing-related value chain,” Modi said. The automobile industry “also needs to put in extra effort.”
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