India is a developing nation which is trying to pave its way in the economical, technology, etc. sectors and has adopted many techniques from other developed countries. One such concept is the vehicle recycling, which is very common in countries like US, Europe, Japan and of course gaining steady popularity in China, Indonesia, Korea, etc. India is still behind on this and is trying now to adopt and implement this policy.
Scrapping – an unorganized entity in India:
So for a long time, the government of India has been trying to draft a policy for the scrapping of older vehicles. Unfortunately, even if it is policy is adopted the old cars that are dumped have no proper or organized procedure in how they are scrapped and this ends up with useful metals being wasted.
After scrapping, the metal scrap or plastic or whatever that is generated is handled in a much unorganized manner by the recycling sector that it becomes hard for the government to keep track to put it to good use.
The government has been suggested by SIAM (Society of Indian Automobile Manufacturers) that every vehicle that is over 15 years has to be scrapped. The logic behind this being the vehicles over 15 years contribute more to pollution and by giving these up for scrapping it would mean that the owner now has an incentive to purchase a new vehicle and also it is a small measure to control pollution..
Government also benefits from a good name as this will ensure:
The pollution can be kept in check; the older vehicles emit more poisonous chemicals and hence contribute to the environmental destruction. If vehicles older than 15 years are scrapped, then pollution can be reduced and global warming kept at bay.
Increase in demand for new vehicles:
Now what with the old vehicles gone, it gives the owner an incentive to purchase a new vehicle leading to an increased demand for new vehicles. The government is also taking measures to present an incentive of INR 25,000 for a car, INR 10,000 for a two-wheeler and INR 1, 50,000 for commercial vehicles. With this, the owner is benefitted and also the government obtains money from the sale of the new vehicle through excise and other taxes.
Reduce Oil import bill as new vehicles are more fuel efficient:
The increase in demand for newer vehicles which are also fuel efficient than their older counterparts will lead to reduction in dependence on oil imports due to fuel efficiency and money used for foreign exchange is saved.
Increase steel demand:
After scrapping of the old vehicle, the scrap that is generated can be recycled and reused which will reduce the cost and dependence on imports. With lower cost and enough metal scraps being produced for production of newer vehicles, the demand for steel would exponentially rise by almost 4X of what it is today.
Finally, if this is well managed and proper guidelines are followed during scrapping, the steel scrap generated will build the demand for steel in India.
Benefiting India as a whole – Scrapping, the billion dollar business:
With the demand for steel, vehicles going up by the day; new ventures can be looked into, a lack of scrap unites ensures that entrepreneurs can set up businesses and can benefit from this reap. Recycling can also help conserve the environment by and improve businesses as:
- An average car weighs 1400 to 1600 kgs, which generates about 950 kgs of Steel Scrap, 105 kgs of Aluminium Scrap, 20 kgs of Copper Scrap and 200-250 kgs of Plastics and Rubber scrap.
- At current scrap prices, a passenger vehicle can fetch around INR 25,000-30,000 (USD 380-450)
- Assuming 3 million cars come for recycling; this can generate total business of 1.2 billion dollar.
The owners of these older vehicles also get monetary benefits mainly:
- 85% of the total scrap value of the old vehicle.
- The category his vehicle falls into if he decides to purchase a new one after submitting the old one for scrapping.
Sustenance of the Auto Scrappage policy:
The government had earlier tried to establish a scrapping policy earlier but in vain but this time around with strict measures and cooperation from every sector – be it the owners of the old vehicles, scrapping /recycling units, government, environmental sectors; if an organized procedure is followed India will definitely emerge much richer and benefit the most from the policy.