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Finance Minister, Nirmala Sitharaman has announced a new Vehicle Scrappage Policy during her presentation of the Union Budget 2021.
In her speech, Nirmala Sitharaman stated that the new vehicle scrappage policy will phase out all old and unfit vehicles. The new policy will also improve sales and manufacturing of more fuel-efficient and environment-friendly vehicles, while also cutting down on the country's import bills.
The Finance Minister also stated that the new vehicle scrappage policy will be based on the fitness tests of both personal and commercial vehicles. The new policy once implemented will encourage scrapping personal vehicles older than 20 years. Similarly, the life of commercial vehicles in the country will now be set for 15 years.
Owners of such vehicles are said to receive a compensation/incentive to replace their old vehicles with new ones. This will in turn, not only help reduce pollution, but also boost vehicle manufacturing in the country.
MoRTH recently approved the vehicle scrappage policy for government-owned vehicles. As per the new policy, all central and state-owned government vehicles older than 15-years will be scrapped. The policy for government vehicles was approved on 25 January and will be implemented from 1 April 2022.
The full details/specifics of the new vehicle scrappage policy will be announced by the Ministry of Road Transport & Highways (MoRTH) soon. The Finance Minister also announced a new voluntary vehicle scrappage policy, the details of which will also be announced at a slightly later stage.
Thoughts On The New Vehicle Scrappage Policy Announced At The Union Budget 2021
The announcement of the much-anticipated vehicle scrappage policy comes as good news for the auto industry. The scrapping of 15 and 20-year old vehicles, will encourage owners to purchase newer vehicles, boosting manufacturing, while reducing pollution levels as well.