SRINAGAR: Union Minister for Road Transport and Highways Nitin Gadkari on Friday said the Centre and states could earn up to Rs 40,000 crore in Goods and Services Tax (GST) if all 97 lakh unfit and polluting vehicles across the country are scrapped.
Speaking at the Automotive Component Manufacturers Association (ACMA) Annual Session 2025, as per NDTV report, Gadkari said 3 lakh such vehicles had already been scrapped up to August this year, including 1.41 lakh government vehicles. He noted that an average of 16,830 vehicles are being scrapped monthly, with the private sector investing Rs 2,700 crore in the programme.
The minister said the implementation of the Vehicle Scrapping Policy would create 70 lakh jobs and reduce automobile component costs by 25 per cent. He urged automakers to extend at least a 5 per cent discount to buyers who present a scrappage certificate, stressing that such an incentive would stimulate demand.
The government has rolled out the Voluntary Vehicle Fleet Modernisation Programme (V-VMP) to build an ecosystem for phasing out old and polluting vehicles in an environmentally sustainable manner. Under the Motor Vehicles Rules, commercial vehicles must undergo a fitness test every two years for the first eight years and annually thereafter. Private vehicles require a test at registration renewal after 15 years, and subsequently every five years, while government vehicles are decommissioned after 15 years.
Highlighting the benefits of GST rationalisation, Gadkari said the policy would boost demand and expand India’s automobile sector. “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 the 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, as reported by Indian Express.
Currently, the automobile industry in the United States is valued at Rs 78 lakh crore, followed by China at Rs 47 lakh crore, while India’s stands at Rs 22 lakh crore.
Gadkari also drew attention to India’s annual expenditure of Rs 22 lakh crore on fossil fuel imports, warning that reliance on overseas shipments worsens pollution levels. He emphasised the need to diversify agriculture into energy, citing ethanol production from sugarcane, broken rice and other produce as a means to enhance energy security.
On the government’s proposal to introduce 27 per cent ethanol blending in petrol (E27), Gadkari clarified that no compromise would be made on quality. He said the Automobile Research Association of India (ARAI) would complete tests before sending the proposal to the petroleum ministry, which would then forward it to the Cabinet. Brazil, he noted, has used E27 petrol blending for the last 49 years.
Raising concerns over road safety, Gadkari pointed out that India recorded 5 lakh accidents and 1.8 lakh deaths in 2023, with 66 per cent of casualties in the 18–34 age group.
