Shares of auto companies rose upto 6 per cent after the Finance Minister Nirmala Sithraman announced scrappage policy. Reacting to the news, shares M&M rose over 6 per cent, followed by Tata Motors, Hero MotoCorp, Maruti and Bajaj Auto, among others. The BSE Auto index was up 3.20 per cent at 22,836.25.
Presenting her third budget in Parliament, FM Sitharaman stated that under the voluntary vehicle scrapping policy, personal vehicles would undergo a fitness test after 20 years, whereas commercial vehicles would need to take it after completing 15 years. The finance minister further added that this will promote fuel-efficient as well as environment friendly vehicles while helping the government slash India's massive import bills.
On July 26, 2019, the central government had said that a policy to scrap over 15-year-old vehicles owned by government departments and PSUs is likely to be notified soon and will be implemented from April 1, 2022.