Vehicle Scrapping Policy

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: Business today

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 lakhs over 15 years old.
    • Additionally, around 17 lakhs 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

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