Union Budget 2021: Vehicle scrappage policy will boost automobile industry, curb pollution issues

Hyundai car factory. Image courtesy Wikimedia Commons

The auto sector is enthused by the government’s move on long-awaited scrappage policy and focus on better road infrastructure. This also means the used automobile industry in India will be more robust in decades to come, they said. Experts in the sector shared their views with Firstpost:

Yogesh Bhatia, Founder, Detel (EV)

We appreciate the government’s vision of Atmanirabhar Bharat post-unprecedented year of 2020. Many domestic players were badly affected and expecting some strong moves by the government. The thrust on automobile sustainability by introducing voluntary scrappage policy will progress auto sector significantly and curb pollution issues and soaring crude oil bills. This announcement will replace the 15-20 years old pollution causing vehicles and generate massive demand for e-vehicles in market.

Sandeep Aggarwal, Founder and CEO Droom

The government extending the life of passenger vehicle and commercial vehicle by five years each is a good catalyst for the automobile industry. The vehicle is among the top 3 big-ticket items for any human being and larger economic life for it only means better ROI for the users. This also means the used automobile industry in India will be more robust in decades to come. The government allocation of Rs 18,000 crore for infrastructure will certainly boost the automobile industry. Also, India adopting global standards for scrapping vehicles will only create a more holistic ecosystem for the industry.

Sunil Gupta, MD and CEO, Avis India

We welcome the Union Budget, especially the announcement of voluntary scrapping policy. This comes in as a big support to automakers who will benefit from this policy. The announcement that personal vehicles older than 20 years and commercial vehicles older than 15 years will have to undergo a fitness test is focused on phasing out older vehicles. It will in turn promote the use of more eco-friendly vehicles. The specifics of the policy will be announced by MoRTH in the days to come. The annual budget brings in good news for commercial vehicles as well with 18,000 crore to be allotted for procuring and maintaining 20,000 buses as well as the construction of road infra to support the sale of commercial vehicles. It is, therefore, the highest-ever allocation of 1.08 lakh crore to MoRTH for capital. We further welcome the finance minister’s move on increasing custom duties on some auto parts by 15 percent.

Sharad Malhotra, President – Automotive Refinishes and Wood Coatings, Nippon Paint India

With an expansionary Budget that focuses on growth, the finance minister has delivered on major counts. Fitness testing for both PVs and CVs is a positive move that will not only generate employment opportunities but also ensure a cleaner environment. Our sector has got a favourable boost in form of finance minister’s voluntary vehicle scrappage policy announcement.

Harsha Kadam, CEO Schaeffler India and President Industrial Business

The infrastructure boost will benefit the heavy and medium commercial vehicle segment, which was much-needed. The voluntary scrappage policy implementation is surely a step in the right direction keeping in mind the environment and auto industry at large. The announcement regarding the PLI scheme investments is going to play an accelerator for the manufacturing sector, which has seen really tough times along with the auto industry. This gives reason for a double celebration as it will encourage global manufacturing firms and also provide incentives for local manufacturing firms to expand. This is a huge step in terms of creating jobs and opportunities for the youth.