Gadkari to meet FM Jaitley today for vehicle scrapping policy

New Delhi: Transport Minister Nitin Gadkari is scheduled to meet Finance Minister Arun Jaitley on Wednesday to take forward the proposed plan to modernise the country's vehicle fleet by scrapping the old ones.

The Finance Ministry had raised some objections over the proposed Voluntary Vehicle Fleet Modernisation Programme (V-VMP) by the Road Transport and Highways Ministry to push 28 million decade-old polluting vehicles off the roads.

"Finance ministry has some objections to a few provisions of the proposed policy. We will be holding a meeting tomorrow to discuss the same," Gadkari said at an event here.

The draft V-VMP policy had earlier proposed to bring under its purview vehicles bought on or before March 31, 2005, numbering about 28 million.

Sources said Finance Ministry has said it would be difficult to provide benefits like tax exemption to such a large number of vehicles.

Now, the Road Ministry will clarify that it would target only medium and heavy vehicles in the first phase, numbering around 1.2 million, sources said.

Under the proposed scheme, people surrendering their old vehicles and buying new ones may receive three benefits amounting to 8-12 per cent of total cost of the new vehicle, the ministry said in its draft report.

"To ensure that the resultant impact is beneficial to the environment, the replacement vehicle needs to be BS-IV compliant, which is going to be rolled out nation-wide by April 2017," the draft policy said.

The policy also said that in addition to environmental and energy efficiency benefits, V-VMP would be able to generate steel scrap worth Rs 11,500 crore domestically every year with the setting-up of organised shredding centres, of which 50 per cent would be generated by MHCVs (buses and trucks).

This will help reduce India's import burden and improve foreign exchange reserves, it added.