Prime Minister Narendra Modi on Friday launched the national vehicle scrappage policy, adding it will help phase out unfit and polluting vehicles. The vehicle scrappage policy will bring in investments of around Rs 10,000 crore, he said.
Modi made the remarks in a video address to the Investor Summit in Gujarat. The summit is aimed at getting investment relating to setting up vehicle scrapping infrastructure.
“Vehicle scrapping will help phase out unfit and polluting vehicles in an environment-friendly manner,” Modi said.
Vehicles will not just be scrapped by their age, but also if they are found to be unfit in automated testing, he said.
"This policy will deeply benefit our middle class," he said. A certificate will be issued on the scrappage of old cars. It will ensure that these people get discount on buying new cars and benefit on taxes, he added.
“We are promoting a circular economy. The aim is to develop a sustainable and environment-friendly economy,” Modi said.
What is Vehicle Scrapping Policy
The Vehicle Scrapping Policy is aimed at creating an eco-system for phasing out unfit and polluting vehicles in an environmentally friendly and safe manner. The policy intends to create scrapping infrastructure in the form of Automated Testing Stations and Registered Vehicle Scrapping Facilities across the country.
The Investors Summit is being organized to invite investment for setting up vehicle scrapping infrastructure under the Voluntary Vehicle-Fleet Modernization Program or the Vehicle Scrapping Policy, said Prime Minister's Office (PMO) in a statement. The Summit is being organized by the Ministry of Road Transport and Highways and the government of Gujarat.
As of April 2021, there were 1.7 million old medium and heavy commercial vehicles plying on the Indian roads according to the Ministry of Road Transport and Highways. In addition, the report cited that the industry believes that the policy has the potential to generate demand for new vehicles.
Rebate on new vehicles
Union Minister Nitin Gadkari had said he has asked automobile companies to offer a five per cent rebate to those buying a new vehicle after producing a scrapping certificate.
Fitness test for vehicles must
- Announced in the Union Budget 2021-22, the policy provides for fitness test after 20 years for personal vehicles, while commercial vehicles would require it after the completion of 15 years.
- A vehicle failing the fitness test or failing to get a renewal of its registration certificate may be declared as End of Life Vehicle.
15-year-old commercial vehicles to be de-registered
- The ministry has proposed that commercial vehicles be de-registered after 15 years in case of failure to get the fitness certificate.
- As a disincentive measure, increased fees for fitness certificate and fitness test may be applicable for commercial vehicles 15 years onwards from the date of initial registration, according to the minister.
Rule for 20-year-old private vehicles
- Another proposal is that private vehicles be de-registered after 20 years if found unfit or in case of a failure to renew the registration certificate.
- As a disincentive measure, increased re-registration fees will be applicable for private vehicles 15 year onwards from the date of initial registration.