Never Give-up Nitin Gadkariji,

 

Dear Shri Gadkariji,

In English, there is a saying :     Frailty , Thy Name is Woman

In today’s India, we could say :  Tenacity, Thy Name is Nitin

Through just announced Vehicle Scrapping Policy, you not only launched an Olympic Game likely to last for  next 30 years but you also won for India,

Steel  Copper and Brass medals , as well ! 

And thank you for incorporating into this policy some of my suggestions listed below ( Plastic medal for me ? )

Following are the reports from today’s news papers :

PM launches Vehicle scrappage policy  /   Tribune India

PM Modi launches Vehicle Scrappage Policy, says it will promote a circular economy

 Explained | PM Modi launches vehicle scrappage policy: What it means for private car owners 

PM introduces policy aimed at phasing out old and unfit vehicles 

 Scrappage Policy will redefine automobile sector 

 Scrappage Policy will draw Rs 10k cr investment : PM 

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PM launches Vehicle Scrappage Policy 

Extract :

Prime Minister Narendra Modi on Friday launched the Voluntary Vehicle-Fleet Modernization Program (VVMP), also known as the Vehicle Scrapping Policy during the ‘Investors Summit for setting up Vehicle Scrapping Infrastructure’ in Gujarat.

The vehicle scrappage policy will bring in investments of around INR 10,000 crore to set up

  #  450-500 Automated Testing Stations (ATS) and

  #  60-70 Registered Vehicle Scrapping Facilities (RVSF), across the country.

A single window clearance portal is being developed where the applications for ATS and RVSF will be catered through a single portal within 60 days.

A vehicle will be declared as End-of-Life or unfit if it fails,

  #   the automated fitness test,

  #  the allowed retest and reinspection test ordered by authorities.

Mandatory automated fitness testing for Heavy Commercial Vehicles (HCVs) is to be effective from April 1, 2023.

For all the other categories of vehicles, fitness testing through ATS is proposed to be mandated in a phased manner from June 1, 2024 onwards.

"The first advantage

-       will be that a certificate will be given on scrapping the old vehicle. Whoever has this certificate will not have to pay any money for registration on the purchase of a new vehicle. Along with this, he will also be given some exemption in road tax.

The second benefit

-        will be that the maintenance cost, repair cost, fuel efficiency of the old vehicle will also be saved in this."

"The third benefit

-        is directly related to life. There will be some relief from the high risk of road accidents due to old vehicles and old technology.

Fourth,

-       it will reduce the harmful impact of pollution on our health," he added.

Nitin Gadkari, Minister of Road Transport & Highways suggested to the Gujarat Chief Minister that, one district should have at least

           #  one registered vehicle scrapping industry and

           #  one automated fitness certificate centre.

Nitin Gadkari also said that his ministry has requested automobile companies to give a 5% discount to those who had deposited their old vehicles for scrapping.

"THERE IS NO SCRAPPING INFRASTRUCTURE IN OUR NEIGHBOURING COUNTRIES. WE CAN THINK OF BRINGING OLD VEHICLES FROM THOSE COUNTRIES TO THE KANDLA PORT.

I URGE (GUJARAT CM) VIJAY RUPANI TO SEE IF THE STATE GOVERNMENT CAN DEVELOP AN INDUSTRIAL CLUSTER IN KANDLA. IF THAT HAPPENS, SCRAP MATERIAL FROM ALL OVER THE WORLD WOULD COME HERE FOR RECYCLING," he said.

"The PM has requested us to create an integrated scrapping hub in Alang, where ships are being recycled. Now, we will try to make it a scrapping hub. Our dream is to make India the scrapping hub of South-East Asia by bringing old vehicles of neighbouring countries for recycling," he added.

According to him, both the Kandla port in Kutch and Alang ship-breaking yard in Bhavnagar can play a crucial role in realising INDIA'S DREAM of becoming the scrap recycling hub of entire South-East Asia.

“Cost of new vehicles will also come down as the scrap would provide copper, aluminium, steel, plastic and rubber to the industry," he said.

"If we recycle on a continuous basis, we can recover 99% of the materials. As per an estimate, this will lead to a reduction of 40% in the raw material cost, which will lead to reduction in prices and higher sales,” Gadkari added.

India imported Rs 23,000 crore worth of scrap steel during the last year as our scrapping is not productive and we are not able to recover energy and rare earth metals.

The country’s vehicle scrappage policy has been in the works since 2015, it was introduced in the 2021 budget session.

==================================================

Following are some of the E Mails that I sent to our Cabinet Ministers :

 

Ø  Car Grave-Yard of World ? ………………………………………………[ 14 Feb 2018 ]

 

Extract :

 

[ A ]    VEHICLE POPULATION

          #  Entire World…………. 2000 Million ( Cars in 2017 )

          #  India………………………   230 Million ( all vehicles in 2016 )

 

[ B ]   NO OF  VEHICLES THAT NEED SCRAPPING

          #  India

              Transport Ministry wants to scrap immediately, some 28 million petrol-

              diesel vehicles which are older than 15 years

              

              In India alone, that figure could be as high as 20  Million per year for

              next 20 years 

          #  Entire World

              200 Million per year

 

 [ C ]   OPPORTUNITY

           #  Car scrap/recycle yards around the World, just do not have the capacity

               to scrap / recycle 200 Million vehicles per year

               ( - a 7 FOLD jump from current 30 million )

          #   In developed countries, labour costs are very high ( as much as 20 –

                30 times of prevalent labour costs in developing countries ), making

                this industry , a “ high cost “ industry

               

 

[ D ]    “ Scrapping Industry MARKET SHARE “ that India should target at  >  50

              Million vehicles per year

 

 [ E ]    WHAT SHOULD BE OUR NEXT STEP ?

 

                  #  Start a new initiative called “  Break  In  India “

                  #   Set up 100 Alang type “ CAR GRAVE YARDS “ all along the vast

                      Indian coast , as part of already announced Coastal Economic Zones

                      (CEZs), Coastal Economic Units (CEUs) and Port-Linked Industria

                       Clusters

                      

                    ( Source : http://sagarmala.gov.in/project/port-led-industrialization  )

                  #   Each Car Grave Yard to house 100 Car Braking Units ( total of

                       10,000 units )

             #   Each unit would have ( mandated ) minimum scrapping capacity of

                  5,000 vehicles per year, aggregating  50 million vehicles per year

                  ( our 25 % market share )

             #   “ Break In India “  must find meticulous / detailed, implementation

                   schedule in :

                   +  EV  Road  Map  ( Policy Document awaiting Cabinet approval )

                   +  Automotive Mission Plan 2016-26   ( AMP 2026 )

                 #   Exempt  CAR  BREAK YARDS from payment of Corporate Income Tax

                      for next 20 years

                 #   Encourage existing Auto Components units to set up such “ Car Break

                      Yards “ by offering to them ,free land ( in those CEZ ) and free

                      electricity

                      

                 #  From world over, encourage “ Cars to be Scrapped “ to get loaded

                      onto “ Ships to be Scrapped “ and brought to these CEZ. After

                      unloading, those ships to be re-directed to Alang !

              

              Foreign Ship Owners can make money ( by hauling cars to India ), even

              in the last journey !

          #  Permit 100 % FDI ( automatic route ) in Car Breaking Units . This will

              help bring latest technology, safer working conditions and high

              productivity . It will also raise the wage levels

                     

                #   There should be no “ Import Duty / Customs Duty “ on cars imported

                     for breaking

                #   GST on sale ( domestic or export ) of salvaged materials should be

                     only 5 %

 

List of other E-Mails to Cabinet Ministers on this subject :

Ø  Vehicle Scrapping : From Policy to Practice … [ 11 April 2021 ]

Ø  Blessing in Disguise ? ………………………………………[21 Mar 2021 ]

Ø  Mahindra Accelo : Saluting a pioneer ………… ..[ 19 June 2018 ]

Ø  Car Grave-Yard of World ?...........................[ 14 Feb 2018 ]

Ø  Alang : Junkyard ? Scrapyard ? SaveYard ? ….[ 12 Dec 2020 ]

 

I suppose, when full operating details of just announced policy are released, it would sharply answer the questions that I had raised in my following e-mail ( some are answered ):

Ø          Vehicle Scrapping Policy                                [ 03 Feb 2021 ]

 

Questions :

With so much debate – and over such a long time -, one would expect that, when released, the policy would answer the following questions (  FAQ  ), sharply / unambiguously :

[ 1 ]

Since “ scrapping “ ( or not ) is voluntary, can I keep “ owning “ my 21 year old car  ? Not a crime ?

[ 2 ]

Can I “ Sell “ it ( to a willing buyer ) or “ Gift “ It ?

[ 3 ]

If it is already “deregistered“ by RTO, do I still have to pay Road-Tax / Green Tax as Owner ?

[ 4 ]

I understand it will get impounded if I drive it on roads but can I keep it parked in my garage ?

[ 5 ]

If traffic police impounds it ( while on road ), will I get any punishment / compensation ?

[ 6 ]

What will happen if I do not take my OLD car for periodic “ re-registration / fitness certificate “ ?

[ 7 ]

What happens if a NEW ( 3 year old ) car fails “ fitness test “ ? Will it get impounded ?

[ 8 ]

What if a 21 year OLD car “passes“ the “ fitness test “ ? Can it continue to run it ?

[ 9 ]

Nearest automated “ fitness testing centre “ is 200 km away ( only 7 out of 25 sanctioned are operational )

Will my old car get impounded while taking it to such centre ?

[ 10 ]

There are only 2 “ authorized scrapping centres “ ( including 1 in Noida ). Where do take my old car ?

[ 11 ]

Are these “authorized scrapping centres“ mandated to pay certain amounts to person surrendering old vehicles ?

There are thousands of combinations of “ Types and Ages of Vehicles “ . Will Govt fix “ scrap prices “ for each combination ?

[ 12 ]

What will Govt ( traffic police / dept ) do with the “ impounded “ vehicles ?  Sell to “ authorized  scrapping centres ?

Will the amount realized get reimbursed to the vehicle’s original owner ? 

Does ownership of an impounded vehicle, pass automatically to the TRAFFIC DEPT or vest with original owner ?

 [ 13 ]

Will there be any INCENTIVE , either for the OLD car owner or for the NEW car dealer ( or both ) ?

[ 14 ]

Who will bear the cost of such an incentive ( and get reimbursed by the State Govt / central Govt ) ?

[ 15 ]

If govt does not have money for paying INCENTIVE, will it consider motivating old-car owners by crediting into their JAN DHAN Accounts certain number of CARBON CREDITS ( like crypto-currency ? ) and launch VEHICLE CARBON CREDIT TRADING EXCHANGE ?

The number of Carbon Credit will depend upon Age/type of OLD car and those of REPLACEMENT car

[ 16 ]

According to news reports, the number of vehicles that will come under the purview are :

Ø  LMV  [ Light Motor Vehicles ] which are older than 20 years : 51 lakh  ( 5.1 million )

Ø  LMV which are above 15 years ( but less than 20 years )     : 34 lakh  ( 3.4 million )

Ø  Medium/Heavy vehicles which are more than 15 years old   : 17 lakh  ( 1.7 million )  

    [ These  MHV do NOT have fitness certificates ]

How many vehicles can be tested in ONE DAY ( and issued fitness – or failure – certificate ) by ONE testing centre ?  Let us assume 100 / day ( 30,000  / year in 300 working days )

       Hence, to test all 102 lakh vehicles in ONE YEAR, we need 340 Fitness Testing Centres !

       If we are to depend upon existing 25 centres only, it will take 14 YEARS !

[ 17 ]

I believe, in India, our current Vehicle population is approx. 24 crore ( 2400 lakh ) This population is growing by about 30 lakh vehicles EACH YEAR

I assume that, out of this some 200 lakh vehicles will become OLD, each year.

These too will need scrapping EACH YEAR ! 

Hence, from 2022, we need to replace 302 lakh ( 102 lakh +  200 lakh )  vehicles EACH YEAR !

Do we have the necessary RESOURCES to test these / scrap these / replace these with new ones ?

==================================================

Reactions of Industry Experts :

 

Venkatram Mamillapalle, Country CEO & Managing Director, Renault India said,

" The scrappage policy is a panacea that will provide the right propulsion in form of generating employment in the auto ancillary/scrappage space and make the sector more organised.

" The infrastructure that will be developed to support the policy will make India an auto hub in the near future with automated testing stations and registered vehicle scrapping facilities across the country," Mamillapalle added.

According to Dr Saon Ray, Visiting Professor, Indian Council for Research in International Economic Relations (ICRIER),

"The vehicle scrapping policy is an important policy which supports the aim of achieving circularity. Efficiency in material use, recycling and reuse of materials and products are important elements in a circular economy and the vehicle scrapping policy can help achieve these objectives.”

Arindam Guha, Partner & Leader, Government & Public Services, Deloitte India said,

 "India’s vehicle scrapping policy represents one of the recent additions to the list of Circular Economy initiatives adopted by the country. It aims to facilitate recovery of key material used in vehicles in the form of steel, aluminum, plastic etc…”

"While the Vehicle Scrapping Policy is definitely a step in the right direction, its effective implementation would depend a lot on the States who would have to formulate supporting policies in areas like,

(a)   financial incentives

       - for replacement vehicles in terms of waiver of registration charges,

          reduced road taxes, as well as

(b)    disincentives

       - for end of life vehicles in the form of higher registration renewal charges

          & road taxes;

(c)    facilitating development of industrial infrastructure and eco-system for

        setting up registered vehicle scrapping facilities as well as vehicle testing

         facilities.

"Gujarat is well poised to leverage the benefits of the Vehicle Scrapping Policy due to a number of inherent advantages. These include

(a)   existing industrial infrastructure and eco-system for scrapping ships in

       Alang with requisite pollution management, effluent treatment systems which have the potential to reduce incremental investments in scrapping facilities;

    

(b)   access to the Western coastline which could enable targeting imported

       vehicles from other countries for scrapping thereby providing economies of scale for an integrated scrapping facility;

     

(c)   a vibrant automobile manufacturing industry which not only provides a

       ready market for materials recovered from scientific scrapping facilities       but could also represent a potential investor base for vehicle scrapping facilities," Guha further added.

     

With Regards,

Hemen Parekh  /  hcp@RecruitGuru.com  /  14 Aug 2021

 

Here is my e-mail to some 50 + members of Alang  Shipbreakers  Association :

 

Hemen Parekh hcp@recruitguru.com

Sent : Mon 22-03-2021 16:20

To    : alangshipbreakers@recruitguru.com

 

Dear Members of Alang Shipbreakers Association,

  

Here is a piece of news report that would interest you :

Informal Scrapyards to be integrated with Registered ones   

 

Extract :

According to the National Green Tribunal, by the end of 2025, the number of vehicles which are 15 years or older is likely to reach over 21 million.

“We are seeing how we can integrate these centres with the e-auction process of MSTC (Metal Scrap Trading Corporation),” the official said. “Another option could be that the authorised centres could go on a collection drive from these smaller, informal scrapping units,” the official added.

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You may want to send a joint petition to :

 Shri Mansukh Mandaviya { Shipping Minister / minister-shipping@gov.in  }

  

With regards,

 Hemen parekh