The central government has provided incentives worth ₹5,000 crore to states under the vehicle scrapping policy on defined milestones under the scheme.

According to data shared by the ministry of finance, so far 44,900 vehicles have been scrapped under the scheme till date at registered vehicle scrapping facilities, 28,100 of those are government owned vehicles which are older than 15 years.

The finance ministry data on vehicle scrappage policy also mentions that incentives worth ₹2,000 crore has been extended to state governments for FY23 under Department of Expenditure’s scheme for special assistance to states for capital investment. DoEs scheme has been further extended for FY2023-24 with a larger incentive of ₹3,000 crore on defined milestones such as scrapping of government vehicle, announcing citizen incentives, and setting up automated testing stations infrastructure, according to the information shared by the ministry.

It may be noted that in order to boost to capital spending by states, the scheme ‘Special Assistance to States for Capital Investment 2023-24' was announced in the Union Budget 2023-24. Under the scheme, special assistance is being provided to the State Governments in the form of 50-year interest free loan up to an overall sum of ₹1.3 lakh crore during the financial year 2023-24.

The scheme has eight parts and the the part II of the scheme, an amount of ₹3,000 crore has been set aside for providing incentives to states for scrapping of State Government vehicles and ambulances, waiver of liabilities on old vehicles, providing tax concessions to individuals for scrapping of old vehicles and setting up of automated vehicle testing facilities.

The finance ministry data further points out that 86 registered vehicle scrapping facilities in 16 states /UTs have been approved under the scheme of which 43 are operational. UP has ten facilities, Haryana has eight while Gujarat has five and three facilities are in Madhya Pradesh. There are two facilities each in Assam, Punjab, Rajasthan, Andhra Pradesh, Karnataka, and Uttarakhand while one each in Maharashtra, Odisha, Chhattisgarh, Bihar, and Chandigarh.

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