Context: 

The Ministry of Road Transport and Highways has introduced the Vehicle Scrapping Policy to create an ecosystem for the phased-out removal of older, unfit, and polluting vehicles across the country.

Image Source: Busimesstoday

About Vehicle Scrapping Policy:

• It was first announced in the Union Budget for 2021-22
• Aim: To achieve multiple goals like reduction in air pollution, the fulfilment of India’s climate commitments, improving road and vehicle safety, better fuel efficiency, and boosting the availability of low-cost raw materials for auto, steel and electronics industry

Need for Vehicle Scrapping Policy:

• Large Number of Older Vehicles: India has a significant number of old vehicles, with 51 lakh Light Motor Vehicles that are more than 20 years old and 34 lakh over 15 years old. 
  • Additionally, around 17 lakh Medium and Heavy Commercial Vehicles are older than 15 years without valid fitness certificates.
• Environmental Impact: Older vehicles are often less fuel-efficient and emit higher levels of pollutants, contributing to air pollution and environmental degradation. 
  • Scrapping these vehicles will help reduce carbon emissions and improve air quality.

Provisions of the Vehicle Scrapping Policy:

• Fitness Test for Old Vehicles:
  • Old vehicles must undergo a fitness test before re-registration.
  • Automated Fitness Centers will conduct the fitness test according to international standards, evaluating emissions, braking systems, safety components, etc.
  • Vehicles that fail the fitness test will be scrapped.
  • Government commercial vehicles over 15 years old and private vehicles over 20 years old will be scrapped.
• Concession in Motor Vehicle Tax:
  • Non-transport vehicles can receive up to 25% concession, and transport vehicles can receive up to 15% concession when purchased against a Certificate of Deposit.
  • Implementation of this provision falls under the jurisdiction of State/UT Governments.
  • So far, 15 states/UTs have announced concessions in motor vehicle tax based on the Certificate of Deposit
• Vehicle Discount:
  • Vehicle manufacturers will provide a 5% discount to customers who present a ‘Scrapping Certificate’ while purchasing a new vehicle.
  • Additionally, the registration fees will be waived off for those buying a new vehicle with a scrapping certificate.
• Disincentive for Old Vehicles:
  • Vehicles that are 15 years or older from their initial date of registration will face increased re-registration fees.

News Source: PIB