For a long time now, we have been looking forward to the Vehicle Scrappage Policy in India. First announced during the Union Budget, this new policy has multiple benefits – for consumers, industry, and the nation, alike. There are so many old and unsafe vehicles on our roads, it is not even a joke. Almost all of these are from the times when policies were more lax and not particularly eco-friendly. However, things are now changing. Nitin Gadkari, Minister of Road Transport and Highways (MoRTH) has just announced some of the important details of this highly-awaited scrappage policy.
As mentioned earlier, all passenger vehicles and commercial vehicles in the country will be required to undergo a fitness test after some time. That period for passenger vehicles will be 20 years, whilst that for commercial vehicles is set at 15 years. At the end of this term, both types of vehicles will be mandated to undergo a fitness test if they are to be re-registered. If a vehicle fails the fitness test, it will be categorized as an “End of Life” vehicle. Owners will be then asked to voluntarily send the automobile for scrapping instead of applying for new registration. Moreover, older vehicles will also attract a new green tax from the state government.
To assist in the speedy and efficient process of vehicle scrappage, Gadkari said that the government will be establishing several vehicle fitness centers throughout the country. He also mentioned that fitness certificates for commercial vehicles will become a mandatory requirement starting April 1, 2023. Meanwhile, a fitness certificate for passenger vehicles (among others) will become a requirement from June 1, 2024. However, in order for the smooth conduct of the policy, it must be noted that this will happen in phases. On the other hand, MoRTH will be implementing the scrapping of 15 years or older government vehicles starting April 1, 2021.
During the presentation of the policy, Gadkari outlined a few points that will incentivize owners to send their vehicles for voluntary scrapping. According to the policy, those who voluntarily send their old vehicle for scrapping will receive a certificate mentioning the same. Furthermore, owners will be given the scrap value of between 4 to 6 percent on the ex-showroom price of a new vehicle. The aforementioned ‘scrapping certificate’ will come in really handy, especially when buying a brand-new car. This is because automakers have been asked to provide these customers with a 5 percent discount. On top of all this, state governments will further hand over rebates on Road Tax. The rebate will be up to 15 percent for commercial vehicles and 25 percent for new passenger vehicles. Finally, the policy might even allow owners to pay nothing for the registration of their new vehicle.
Gadkari also outlined consequences for those who would continue driving vehicles that have failed their fitness tests. He cautioned that these individuals will not only face heavy penalties but will also have their vehicle impounded. However, if you own a classic or vintage automobile, do not worry, because this policy does not concern you. Meanwhile, Gadkari is confident that the new vehicle scrappage policy will help the automobile industry to grow and prosper. This, he says, will not only bring in extra revenue but also bring employment for many across the country.