What is Vehicle Scrappage Policy 2021? Incentives to vehicle owners under the Vehicle Scrapping Policy 2021
Narendra Modi launches the Vehicle Scrappage Policy on 13 August 2021 at the Investor Summit in Gujarat for setting up vehicle scrapping infrastructure.
What is Vehicle Scrappage Policy?
Nitin Gadkari, Union Minister of Road Transport and Highways, announced the Vehicle Scrapping Policy in Lok Sabha on March 18, 2021.
The policy’s objective was to reduce the number of old and defective vehicles on the road, reduce vehicular air pollution in order to meet India’s climate commitments, improve road and vehicular safety, improve fuel efficiency, formulate the currently unregulated vehicle scrapping industry, and increase the availability of low-cost raw materials for the automotive, steel, and electronics industries.
The criteria for scrapping a vehicle are primarily based on vehicle fitness via Automated Fitness Centres in the case of commercial vehicles, and non-renewal of registration in the case of private vehicles.
If a vehicle fails its fitness test or fails to renew its registration certificate, it may be declared as an End of Life vehicle. The Central Motor Vehicle Rules, 1989 mandated criteria for determining vehicle fitness are emission tests, braking, safety tests, and so on…
The criteria for determining vehicle fitness will primarily be emission tests, braking, safety equipment, and a variety of other tests mandated by the Central Motor Vehicle Rules, 1989.
What are the Vehicle Scrappage Policy proposals?
- If a commercial vehicle fails to obtain a fitness certificate after 15 years, it is proposed that it be de-registered.
Increased fees for fitness certificates and fitness tests may be applied to commercial vehicles 15 years and older from the date of initial registration as a disincentive measure.
- It is proposed that private vehicles be de-registered after 20 years if they are found unfit or if registration certificates are not renewed. Increased re-registration fees for private vehicles will be implemented as a disincentive measure 15 years after the date of initial registration.
- It is proposed that, after 15 years from the date of registration, all vehicles of the Union and State governments, Municipal Corporations, Panchayats, State Transport Undertakings, Public Sector Undertakings, and autonomous bodies of the Union and State governments be de-registered and scrapped.
- The scheme will provide strong incentives for owners of old vehicles to scrap their vehicles through registered scrapping centres, which will issue the owners with a scrapping certificate.
What are the incentives to be provided to vehicle owners under the Vehicle Scrapping Policy?
To boost vehicle scrapping, some incentives were given by the government to private vehicle owners to encourage their old vehicles to be scrapped.
- The scrap value of an old vehicle is determined by the scrapping centre, which is usually 4-6 per cent of the ex-showroom price of a new vehicle.
- State governments may be advised to provide a road tax rebate of up to 25% for personal vehicles and 15% for commercial vehicles.
- Vehicle manufacturers should also offer a 5% discount on the purchase of a new vehicle against the scrapping certificate.
- In addition, registration fees may be waived if a new vehicle is purchased against the scrapping certificate.