Scrapping 97 Lakh Unfit Vehicles Can Yield Rs 40,000 Crore GST, Create 70 Lakh Jobs: Nitin Gadkari

Union Road Transport and Highways Minister Nitin Gadkari on Friday said the Centre and states could earn up to Rs 40,000 crore in Goods and Services Tax if all of India’s 97 lakh unfit and polluting vehicles are scrapped.

Speaking at the ACMA Annual Session 2025, Gadkari said that till August this year, three lakh such vehicles had already been scrapped, including 1.41 lakh government-owned vehicles. At present, around 16,830 vehicles are being scrapped each month, with the private sector investing Rs 2,700 crore to build capacity.

“According to our estimate, there are 97 lakh vehicles which need to be scrapped... 70 lakh jobs will be created and Rs 40,000 crore benefits will go to the Centre and states in GST if all unfit and polluting vehicles will be scrapped,” he said.

The minister noted that the government has rolled out the Voluntary Vehicle Fleet Modernisation Program, or Vehicle Scrapping Policy, to phase out unfit vehicles in an environment-friendly manner.

Under Motor Vehicle Rules, fitness tests for commercial vehicles are mandatory every two years up to eight years, and annually thereafter. For private vehicles, the test is required at the time of registration renewal after 15 years, and every five years subsequently. Vehicles registered in the name of governments expire after 15 years.

Gadkari urged the automobile industry to offer at least a 5% discount to customers who present a scrappage certificate while buying a new vehicle. “It is not charity, because it is going to increase the demand,” he said, adding that successful implementation of the scrapping policy could reduce auto component costs by 25%.

Pointing to GST rationalisation as a boost to the industry, Gadkari said: “Prime Minister Narendra Modi has taken decision to reduce GST rates, and that is a good incentive for all of you. This is going to increase your market potential, boost demand and increase size of the industry. I am very much confident that we will make India’s automobile industry number one in the world within the next five years.”

Currently, the size of the US automobile industry is Rs 78 lakh crore, followed by China at Rs 47 lakh crore, while India’s auto industry stands at Rs 22 lakh crore.

The minister also flagged India’s dependence on imported fossil fuels, costing Rs 22 lakh crore annually, as a cause of pollution and energy insecurity. He stressed the need to diversify agriculture into energy production through ethanol derived from sugarcane, broken rice, and other produce.

On road safety, Gadkari highlighted that in 2023, India reported 5 lakh accidents and 1.8 lakh deaths, 66% of which were in the 18–34 age group.

(With PTI inputs)