Govt unveils vehicle scrappage policy

Why In News?

The central government announced the long-awaited vehicle scrappage policy, which was announced by the finance minister Nirmala Sitharaman in her budget speech. 

Salient features of the scrappage policy:

1) Personal vehicles will be required to undergo a fitness test at government-certified fitness centres. Owners can scrap their vehicles anywhere in the country irrespective of their registration place.

2) The policy will not be applicable on vintage cars.

3) Appointment for fitness centres may be booked online, according to the new guidelines. Test reports will be generated in an electronic mode.

4) In case of failure to obtain fitness certification or found unfit, vehicles will be de-registered.

5) The government also proposed that all vehicles of the central government, state government, municipal corporation, panchayats, state transport undertakings, public sector undertakings and autonomous bodies with the Union and state governments may be de-registered and scrapped after 15 years from the date of registration. The tentative date for scrappage of government and PSUs vehicles above 15 years of age is April 1, 2022.

6) The owners will be provided with a scrapping certificate after which they will be eligible for the incentives proposed under the scheme.

7) The incentives include scrap value for the old vehicle, which will be approximately 4-6% of the ex-showroom price of a new vehicle.

8) The state governments may be advised to offer a road-tax rebate of up to 25% for personal vehicles and up to 15% for commercial vehicles.

9) The vehicle manufacturers are also advised for providing a discount of 5% on the purchase of a new vehicle.

10) The registration fees may also be waived for the purchase of a new vehicle.

As per the new policy, in case of failure to get a fitness certificate, commercial vehicles will be de-registered after 15 years.

Private vehicles will be de-registered after 20 years if found unfit or in case of a failure to renew registration certificates.

Vehicle scrappage and replacement is seen internationally as a route to rejuvenate COVID-19-affected economies by privileging green technologies, notably electric vehicles (EVs), and also as an initiative to achieve net zero emissions by mid-century under Paris Agreement commitments. 

Implementation plan:

Tentative timeline for the new rules:

• Rules for fitness tests and government scrapping centres to come into effect – 1 October 2021
• The scrapping of government and PSU vehicles above 15 years of age to start – 1 April 2022
• Fitness testing for heavy commercial vehicles – 1 April 2023

Need for such Vehicle Scrappage Policy:

First, According to the Centre for Science and Environment (CSE), by 2025 India will have over two crore old vehicles nearing the end of their lives. Not only that, India adds 1,400 vehicles every day. The scrappage policy will reduce the congestion on the roads.

Second, A logical extension of NGT ruling for Delhi NCR and Scrappage policy of Government Vehicles.

Background: