Centre, states to earn Rs 40,000 cr in GST if all 97 lakh polluting vehicles scrapped: Nitin Gadkari
New Delhi, Sep 12: Union Minister Nitin Gadkari on Friday said the Centre and states could earn up to Rs 40,000 crore in Goods and Services Tax if all 97 lakh unfit and polluting vehicles are scrapped.
Addressing ACMA Annual Session 2025, Gadkari further said up to August this year, 3 lakh unfit and polluting vehicles have been scrapped, out of which 1.41 lakh were government vehicles.
“According to our estimate, there are 97 lakh (unfit and polluting) vehicles, which we need to scrap...70 lakh jobs will be created and Rs 40,000 crore benefits will go to the Centre and states in GST if all unfit and polluting vehicles will be scrapped,” he said.
The road transport and highways minister said that at present, an average of 16,830 vehicles are being scrapped monthly, and the private sector has invested Rs 2,700 crore.
The govt has implemented the Voluntary Vehicle Fleet Modernisation Program (V-VMP) or Vehicle Scrapping Policy for the creation of an ecosystem to phase out unfit and polluting vehicles in an environmentally friendly manner.
Under the Motor Vehicles Rules, a fitness test for commercial vehicles is mandatory every two years up to eight years and annually thereafter. In case of private vehicles this test is required at the time of registration renewal, which is after 15 years and then every five years. For vehicles registered in the name of governments, the usage expires after 15 years.
Gadkari also urged the automobile industry to consider offering a minimum discount of 5 per cent to customers who submit a scrappage certificate while buying a new vehicle. “It is not charity, because it is going to increase the demand,” he said.
According to Gadkari, while the auto industry has benefited a lot from the GST rationalisation, the successful implementation of Vehicle Scrapping Policy is going to reduce the cost of automobile component by 25 per cent.
“Prime Minister Narendra Modi has taken a decision to reduce the GST rates, and that is a good incentive for all of you. This is going to increase your market potential, boost demand and increase size of the industry.
“I am very much confident that we will make India’s automobile industry number one in the world within next five years,” he said.
Presently, the size of the US automobile industry is Rs 78 lakh crore, followed by China (Rs 47 lakh crore) and India (Rs 22 lakh crore).
The minister noted that India is spending Rs 22 lakh crore for importing fossil fuels every year and because of import of fossil fuels, “we are facing problem of pollution”.
