Centre Sets Aside Rs 2,000 Crores To Encourage States To Scrap Old Vehicles
|According to data, the Central government has allocated an additional ₹2,000 crore under the programme to encourage states to discard condemned government vehicles or those that are older than 15 years.
The central government will pay states an additional ₹2,000 crore under the Special Assistance for Capital Investment scheme to encourage them to discard old cars and automobiles. It will also give tax breaks to individuals for the same.
The government unveiled the "Special Assistance to States for Capital Investment" scheme in the 2022–23 Budget with a budget of ₹1.05 lakh crore. The programme offers state governments financial support through a 50-year, interest-free loan for capital projects.
Waiving Liabilities On Old Vehicles
According to data, the Central government has allocated an additional ₹2,000 crore under the programme to encourage states to discard condemned government vehicles or those older than 15 years old. Additionally, the government is considering offering tax concessions to people who scrap their old cars, reports The Hindu.
A new sector of road transportation has been designated for granting rewards related to mandated improvements by states under the scheme, according to a letter the finance ministry sent to the states in December. This will allow the centre to waive liabilities on old vehicles and providing tax breaks to individuals as an incentive for scrapping such vehicles.
With the inclusion of the road transport sector, the total outlay under the scheme has increased to ₹1.07 lakh crore, up from ₹1.05 lakh crore announced in the Budget. As of yet, the centre has approved ₹77,110 crores under the scheme, with states receiving ₹41,118 crores.
Paving Way For Capital Investments, EV Markets
The scheme, which has a budget of ₹80,000 crores, aims to encourage states to invest in capital projects. Furthermore, states are encouraged to push reforms such as privatisation or disinvestment, digitization, urban reforms, optical fibre cable projects, and rural road construction.
Moreover, if individuals and states scrap most automobiles in the country, it will boost the sales of electric vehicles in the market, which in turn, will help India move closer to achieving its target of reduced carbon emissions.
Also Read: In A First, India Beats Japan To Become Third Largest Auto Market, Know How