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The new vehicles scrappage policy has been launched in the country. The Prime Minister, Shri Narendra Modi announcing the new scrappage policy stated that it is a significant milestone in India's development journey.
The new policy might take some time to implement. The tentative date for the implementation of the policy is October 1, 2021. Meanwhile, the scrapping of government and PSU vehicles above 15 years will begin from April 1, 2022.
What is vehicle scrappage policy and how does it help for economic growth? We will answer all questions related to the scrappage policy in this article. Read through the article to find out how your vehicle could be affected by the new policy.
Vehicle Scrappage Policy
Earlier, Union Minister Nitin Gadkari had announced that there are around 51 lakh light motor vehicles that are older than 20 years, 34 lakh light motor vehicles that are older than 15 years and 17 lakh medium and heavy commercial vehicles are older than 15 years. These vehicles will generally pollute the environment by around 10 times than the newer vehicles.
As a result, the new policy will help the government to phase out the old and unfit vehicles plying on Indian roads. As per the policy, every private and commercial vehicle will undergo a fitness test after its initial registration period of 15 years and 10 years, respectively. The vehicle needs to clear the fitness test to continue plying on roads. Failing which, the vehicle has to be scrapped.
According to the research, vehicles plying on the roads beyond the initial registration period could rapidly pollute the environment as compared to newer vehicles, which will be having improved emission control.
Apart from the pollution, they will also tend to consume more fuel as well. As a result, the new policy will ensure to remove polluting vehicles plying on roads and in return offer incentives to the owners.
How Will Vehicle Scrappage Policy Help India?
With the new scrappage policy, the Indian Government aims to reduce environmental pollution caused by old vehicles. Additionally, recycling old vehicles produces raw materials such as steel, plastic rubber and more, which can then be used in manufacturing other items.
This policy also helps reduce the dependency on raw materials import, which in turn reduces the cost of manufacturing. It will help brands to price their products aggressively. The policy also provides incentives to old vehicle owners to encourage the purchase of new vehicles, which will also help automotive sales and the overall economic growth of the country.
Rules Of Vehicle Scrappage Policy
Private and commercial vehicles that have passed the initial registration period of 15 years and 10 years, respectively, will be subjected to a fitness test. With successful testing, vehicles will be allowed to ply on roads for 5 years, after which they will have to again attend the fitness test.
This process will be repeated every five years from the date of initial registration getting expired. At any point, if the vehicle fails the test, it will be taken off the roads and recycled via the vehicle scrappage policy.
Fitness Test Details For Vehicle Scrappage Policy
The fitness test will determine the roadworthiness of a vehicle. This includes pollution under the allowed limit, correct operation of braking, engine performance and other tests. These tests will be conducted at the automated fitness test centres, which are just like the MOT centres available overseas.
The fitness test is said to become more stringent to filter the vehicles. This includes even misalignment in the headlamps or if they are not powerful enough, the test will result in a fail.
How Is The Vehicle Scrapped?
After the vehicle fails the fitness test, they are labelled as EOLV (End of Life Vehicle). These vehicles will be recycled at the Registered Vehicle Scrapping Facilities. However, an owner would get three chances to appear for the fitness test before the vehicle is labelled as EOLV.
Vehicle Scrappage Policy Incentives & Benefits
Owners scrapping their old vehicle and plans for a new vehicle purchase will be offered incentives from the government. Incentives will range between 4% and 6% cost of the ex-showroom price of the old vehicle.
Additionally, they will receive a rebate of up to 25 per cent of road tax upon purchase of a new vehicle. In the case of commercial vehicles, the road tax rebate will be 15 per cent.
Also, vehicle manufacturers have been advised to provide a 5 per cent discount on new vehicle purchases to customers produce a scrapping certificate and a waiver on the registration fee.
Speaking on the announcement Prime Minister, said, "The launch of Vehicle Scrappage Policy today is a significant milestone in India's development journey. The Investor Summit in Gujarat for setting up vehicle scrapping infrastructure opens a new range of possibilities. I would request our youth & start-ups to join this programme."
He further added, "Vehicle scrapping will help phase out unfit & polluting vehicles in an environment-friendly manner. We aim to create a viable #circulareconomy & bring value for all stakeholders while being environmentally responsible."
Thoughts About The New Vehicle Scrappage Policy In India Announced By Narendra Modi
The vehicle scrappage policy will ensure to keep the environment clean by barring the polluting vehicles to ply on roads. The industries will also get benefited from the raw materials produced by recycling old vehicles. In the end, owners are provided with a host of benefits by scrapping old vehicles and purchase a new vehicle.