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Nitin Gadkari presents ‘vehicle scrappage policy’ in Lok Sabha

By Saima Siddiqui 
Updated Date
Nitin Gadkari presents ‘vehicle scrappage policy’ in Lok Sabha

New Delhi: The Union Minister for Minister for Road Transport & Highways, Nitin Gadkari on Thursday presented the vehicle scrappage policy in the lower House of the Parliament.

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Asserting it to be a win-win policy for scrapping old vehicles, the transport minister said “Older vehicles pollute 10 to 12 times more than fit vehicles. This will be a win-win policy that will benefit the general public This policy will enable setting up of scrap centres.”

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

Gadkari explained that recycling will reduce cost of components for the automobile industry while it can also benefit buyers as they will get discount on registration and road tax by state for buying new vehicles against the scrapped one.

Under this new policy, any vehicle failing the fitness test or failing to get a renewal of its registration certificate may be declared as ‘end of life vehicle’.

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“The policy is aimed at reducing the population of old and defective vehicles, bringing down vehicular air pollutants, improving road and vehicular safety,” Gadkari said.

“Besides, it will help in achieving better fuel efficiency, formalising the informal vehicle scrapping industry, and boost the availability of low-cost raw materials for the automotive, steel and electronics industry,” he added.

Gadkari also alleged that his government is working to introduce such schemes that will make India the world’s largest automobile hub in the next 5 years.

Features of new vehicle scrappage policy are:

-Buyers will get scrap value for the old vehicle by the scrapping centre, which is approximately 4-6% of 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.

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-Additionally, the registration fees may also be waived off for purchase of new vehicle against the scrapping certificate.

-The automobile makers have been advised for providing a discount of 5% on purchase of new vehicle against the scrapping certificate.

-An increase in RC and fitness certificate renewal fee will be charged for personal and commercial vehicles respectively, while an additional penalty will also be applicable for delay in renewal of certificates.

-State likely to offer an additional levy of green tax on old vehicles.

-Mandatory automated fitness test will be required; those failing in test to be deregistered automatically.

-Automobiles owners may get higher value for scrapping old ones.

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-Vehicle owner will be free to take the old vehicle for scrapping to any centre in the country, irrespective of the place of registration.

-Scrapping centres will keep records, verify ownership of vehicles to be scrapped by using ‘VAHAN’ database.

-Stolen vehicles will not be scrapped by the scrapping centres.

-Vehicles that would be automatically scrapped are:

a) 15 year plus government & PSU-owned vehicles,

b) those damaged in fire, riots or any devastation,

c) declared as defective by manufacturers,

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e) those confiscated by enforcement agencies.

Tentative timeline for implementation of the proposed scrapping policy:

-Rules for fitness tests and scrapping centres will come into effect from October 1, 2021.

-Scrapping of government and PSU vehicles above 15 years of age will come into effect from April 1, 2022

-Mandatory fitness testing for heavy commercial vehicles will be undertaken from April 1, 2023.

-Mandatory fitness testing for other categories will come into effect in a phased manner from June 1, 2024.

Meanwhile, the road transport and highway ministry will publish a draft notification for stakeholders’ comments in the next few weeks.

As per Union transport minister, there are 51 lakh light motor vehicles that are older than 20 years and 34 lakh light motor vehicles that are older than 15 years. While around 17 lakh medium and heavy commercial vehicles are older than 15 years without a valid fitness certificate.

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