The central government on Thursday announced the long-awaited vehicle scrappage policy, which was announced by the finance minister Nirmala Sitharaman in her budget speech. Calling the policy a “win-win” for everyone, Union transport minister Nitin Gadkari said that it will reduce pollution and increase road safety.
As per the new policy, in case of failure to get a fitness certificate, commercial vehicles will be de-registered after 15 years, said Gadkari. Private vehicles will be de-registered after 20 years if found unfit or in case of a failure to renew registration certificates, he added.
The policy is touted as a major step to boost the Indian automobile sector, reeling under the adverse impact of the Covid-19 pandemic. Once it is implemented, the scrappage policy will make India the world’s largest automobile hub in the next five years, Gadkari stated in Parliament.
Here is all you need to know about the scrappage policy:
- Personal vehicles will be required to undergo a fitness test at government-certified fitness centres. Owners can scrap their vehicles anywhere in the country
- The policy will not be applicable on vintage cars.
- In case of failure to obtain fitness certification or found unfit, vehicles will be de-registered.
- The government also proposed that all vehicles of the central government, state government, municipal corporation, panchayats, state transport undertakings, public sector undertakings and autonomous bodies with the Union and state governments may be de-registered and scrapped after 15 years from the date of registration. The tentative date for scrappage of government and PSUs vehicles above 15 years of age is April 1, 2022.
- The owners will be provided with a scrapping certificate after which they will be eligible for the incentives proposed under the scheme.
- The incentives include scrap value for the old vehicle, which will be approximately 4-6% of the ex-showroom price of a new vehicle.
- The state governments may be advised to offer a road-tax rebate of up to 25% for personal vehicles and up to 15% for commercial vehicles.
- The vehicle manufacturers are also advised for providing a discount of 5% on the purchase of a new vehicle.
- The registration fees may also be waived for the purchase of a new vehicle.
Benefits Of Scrappage Policy:
- According to the Union Road Transport Minister Nitin Gadkari, There are 51 lakh light motor vehicles which are over 20 years old in India. At the same time, there are 17 lakh commercial vehicles in India which are over 15 years and run without a valid fitness certificate.
- These vehicles according to the minister are the major cause of vehicular pollution in our country.
- Many of these vehicles are not well maintained and are not fit to run on roads. At the same time these vehicles feature old technology and this means they compromise on safety as well.
- Last but not the least, these vehicles run on older technology and as a result are not as efficient as new vehicles.
- This means that older vehicles pollute, consumer more fuel and are unsafe to run. This then is enough for the government to consider them to be worth scrap.
- Vinkesh Gulati, President, Federation of Automobile Dealers Associations (FADA) added, “FADA is happy to note that the Hon’ble Finance Minister has finally announced the much awaited Scrappage Policy, though voluntary to phase out old vehicles.
- However the minister further added that scrapping of old vehicles would result in more benefits. This comes in form of recycling materials like steel, plastic and copper. These materials will be reused and as a result will reduce costs. At the same time the minister added the Scrappage Policy would boost vehicle sales in the country as the one scrapping the vehicle would surely buy a new one.
However the minister further added that scrapping of old vehicles would result in more benefits. This comes in form of recycling materials like steel, plastic and copper. These materials will be reused and as a result will reduce costs. At the same time the minister added the Scrappage Policy would boost vehicle sales in the country as the one scrapping the vehicle would surely buy a new one.
Earlier this year, Finance Minister Nirmala Sitharaman confirmed the arrival of vehicle scrappage policy while announcing Budget 2021. At the Union Budget 2021-2022 announcement, one of the biggest talking points from Finance Minister Nirmala Sitharaman’s speech was the official announcement of a vehicle scrappage policy in India.