Union Minister announces Vehicle Scrappage Policy  

The Union Minister for Road Transport & Highways, Nitin Gadkari has announced the most awaited Vehicle Scrappage Policy in Lok Sabha. The scrapping of old vehicles, recycling them will help in reducing the cost of components for the automobile industry. Not only that it will also help in curbing the pollution levels by taking out the polluting vehicles off the road.

The most interesting part of this policy is that it will provide incentives to owners of old vehicles to scrap unfit vehicles with the help of registered scrapping centres. The vehicle owners will get a 25 per cent rebate on road-tax for personal vehicles, and 15 per cent for commercial vehicles, a 5 per cent discount on a purchase of a new vehicle against the scrapping certificate, among others, he said.

Incentives to vehicle owners

• 25 per cent rebate on road-tax for personal vehicles
• 15 per cent for commercial vehicles
• 5 per cent discount on the purchase of a new vehicle

This will help and encourage the vehicle owners to scrap the vehicles at the end of the vehicles life rather than going for a fitness test and renew registration. If the owner agrees to scrap the vehicle 4-6% scrap value will be given to the owner.

Boosting the Indian automobile sector

• 30 per cent boost to the Indian automobile industry turnover to Rs 10 lakh crore
• At present, the automobile industry’s annual turnover is ₹4.5 lakh crore

“The objectives of the policy are to reduce the population of old and defective vehicles, achieve a reduction in vehicular air pollutants to fulfil India’s climate commitments, improve road and vehicular safety, achieve better fuel efficiency, formalize the currently informal vehicle scrapping industry and boost the availability of low-cost raw materials for automotive, steel and electronics industry,” Gadkari said.

Scrapping Policy will create direct employment for more than 35,000 people. pic.twitter.com/SE8NzTMEde

— Office Of Nitin Gadkari (@OfficeOfNG) March 18, 2021

He said that this policy will enable to set up of scrap centers that will be benefited to both vehicles makers and components makers.

First, it was announced in the Union Budget 2021-22 and Finance Minister Nirmala Sitharaman told that this policy will help to phase out old and unfit vehicles. The vehicles would undergo fitness tests. The vehicles would undergo fitness tests. People with personal vehicles have to undergo a fitness test after 20 years of the purchase of their vehicle and in the case of commercial vehicles, the vehicles should undergo a fitness test after 15 years. The new vehicle scrapping policy will be implemented in the country on 1st April 2022. The declaration of the policy will be done within 15 days from the day the budget has been announced.

Timeline given:

• Fitness tests and scrapping centres will come into effect from October 1, 2021
• Scrapping of government and PSU vehicles above 15 years of age to be undertaken from April 1, 2022
• Mandatory fitness testing for heavy commercial vehicles to be in effect from April 1, 2023.
• Mandatory fitness testing for other categories will come into effect in a phased manner from June 1, 2024.

He said that once the policy comes into practice, the availability of scrapped material like steel, plastic, rubber, aluminium, etc. will be used in the manufacturing of automobile parts which will reduce their cost by 30-40 per cent.

The minister said it will help improve fuel efficiency, reduce pollution and GST income will also rise due to the purchase of new vehicles.

Last year the United Kingdom considered a proposal under which the owners of diesel or petrol vehicles may get up to 6,000 pounds if they exchange these cars for electric vehicles.

This consideration will bring dual benefits, one is spurring demand for new vehicles and it also protects the environment. This move comes close to the heels of countries like France and Germany adopting more and more EVs.The UK Prime Minister Boris Johnson is considering the car scrappage scheme in order to give a boost to the automotive sector in current Covid-19 times.

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