Cash for Clunkers Scheme

On February 1, 2021, Finance Minister- Nirmala Sitharaman, announced a scheme for new voluntary scrap-page of private vehicles older than 20 years and commercial vehicles older than 15 years based on a fitness test. This scheme is named as ‘Cash for Clunkers’. Minister for Road Transport & Highways, Nitin Gadkari, provided details about the scheme. He mentioned that this scheme would increase the sales of cars and trucks as well as create more job opportunities thereby increasing the new investment to 10 billion rupees. This is a much-awaited scheme for the vehicle owners especially truck owners under which the vehicle owners would exchange their scrap old cars/ trucks for new ones. This is a voluntary scheme for the Indian vehicle owners taking 1990 as the base year for comparison.

Overview:

List of scheme lunched by Central Government

Objectives & Benefits:

• The main objective of the scheme is to increase the sales of cars and trucks in the country
• It also aims to create about 50,000 new job opportunities in the road transport sector
• This scheme tends to encourage fuel efficiency
• It will target to reduce vehicle pollution in the country
• Car and Truck owners will get cash incentives for their scrap vehicles
• This scheme will increase the natural demand of vehicles in the country

Key Points:

• In the Budget 2021 speech, Finance Minister, Nirmala Sitharaman announced a new scheme named ‘ Cash for clunkers’ for old vehicle scrap
• Minister of Road Transport and Highways, Nitin Gadkari announced the scheme details
• Under this scheme the car and truck owners could scrap their old vehicles for the new ones based on a fitness test
• Incentives will be provided to the car owners under this scheme
• This voluntary scheme aims to increase about 10 billion rupees in investment
• It tends to create about 50,000 jobs in the road transport sector
• This scheme is a much-awaited scheme for the car and truck owners to scrap their old vehicles thereby
• It will reduce the pollution from the old, used and depreciated vehicles as it tends to encourage a pollution free environment
• About 10% of 3.7 million trucks and 5% of 5.2 million cars on Indian roads would be eligible under this scheme
• Under this scheme, base year for estimation and comparison will be considered as 1990, by the Federation of Automobile Dealers Association of India
• This scheme would increase the annual sales of cars and trucks in the country thereby benefiting the producers of private cars and trucks.