India to spend over Rs 1,000 crore just on scrapping and replacing Central govt vehicles older than 15 years

"All central government vehicles beyond 15 years will be scrapped and will be replaced. Expenditure will be allocated under different department but the amount is likely to exceed 1000 crores. We will also be extending support to states under the state investment policy, but that will on meeting certain conditions under the national scrapping policy"', said Finance Secretary TV Somanathan in response to a CNBC TV18 query.

Sohinder Gill, Director General of the Society of Manufacturers of Electric Vehicles (SMEV), said, "After passing through a challenging phase of scarcity of good quality ‘Made in India’ EV components for the last two years, the local supply chains are beginning to take shape. Therefore, the hike in customs duty on SKD/CBU is opportune as it will further incentivize the local suppliers because of the relative pricing advantage. Additionally, the continuation of the existing import sops for machinery used to produce lithium-ion batteries will help support current battery pricing. There are still a lot of EV component/parts that need to be imported, including lithium batteries, permanent magnets for electric motors, semiconductors, etc. We anticipated that the customs duty on these necessary imports would be rationalised in order to help keep EV prices in check."

Sumit Issar, Managing Director at Mahindra Accelo, said, "Cero (Mahindra MSTC Recycling) warmly welcomes the Central government’s decision to allocate funds to assist state governments in this endeavour under the vehicle scrappage policy. This move will give the vehicle scrappage policy announced by MoRTH the much-needed push and acceptance and we expect this financial help to be utilized by States in replacing old vehicles as well as waiving off dues on old vehicles intended for scrapping."

Automobile Industry has welcomed the tax changes in the budget which will put more disposable income in the hands of consumers.