Vehicle Scrappage Policy: Center will give Rs 2000 crore to states for scrapping old vehicles

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Vehicle Scrappage Policy: The central government will give an incentive of Rs 2,000 crore to the states under the ‘Special Assistance for Capital Investment Scheme’ for scrapping old vehicles. Apart from this, tax concession will also be given to the people who offer the vehicle for scrap.

The government had introduced the ‘Special Assistance to States for Capital Investment’ scheme with an outlay of Rs 1.05 lakh crore in the 2022-23 budget. Under the scheme, financial assistance is given to state governments in the form of interest-free loans for capital projects for 50 years.

Now, the Center has earmarked an additional Rs 2,000 crore under the scheme to encourage states to scrap old government vehicles or vehicles that are more than 15 years old. Along with this, tax concessions will be given to the people who bring vehicles for scrap.

In a letter to the states last month, the finance ministry had said that road transport has been added as a new sector in the reforms set out under the plan. Incentives have been added to the scheme for scrapping old vehicles. An amount of Rs 2,000 crore has been earmarked for scrapping the state government’s vehicles which are more than 15 years old. Apart from this, there will be exemption of liabilities on old vehicles and people who bring their old vehicles for scrap will be given tax concession.

With the inclusion of the road transport sector in it, the total expenditure under the scheme has increased from Rs 1.05 lakh crore to Rs 1.07 lakh crore. So far, the government has sanctioned Rs 77,110 crore under the scheme, out of which Rs 41,118 crore has been released to the states.

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