National Automobile Scrappage Policy Launched By PM Narendra Modi: Key Takeaways

Under this policy, the vehicles will not be scrapped merely on the basis of age but the vehicles will be scientifically tested through authorized, automated testing centers, and thereafter, unfit vehicles will be scrapped scientifically.

This policy intends to ensure that registered vehicle scrapping facilities all over the counties are technology-driven and transparent.

The policy was first presented at the Union Budget 2021 by Finance minister Nirmala Sitharaman. Soon after, Union Minister for Road, Transport and Highways Nitin Gadkari revealed the details of the policy at a Lok Sabha session and notified the new vehicle scrappage policy.

The policy is aimed to reduce India's oil import bills by improving fuel efficiency, reduce environmental pollution, and improve road and vehicular safety by getting rid of old and defective vehicles, boost the availability of low-cost raw materials like plastic, steel, aluminum, steel, rubber, electronics, etc. for the OEMs.

Importantly, a vehicle should be scrapped at the end of its lifecycle so that they no more run on the roads and this policy of getting off older vehicles will generate space for new vehicles, which will boost the sales in the otherwise battered and bruised Indian auto industry.

Once the registration of the vehicles would be over, they will have to go mandatory fitness test, however, the vehicle owners can also avail the scrapping option.

Key points of the Policy

• The policy has provisions to scrap private vehicles that are over 20 years old and commercial vehicles that are more than 15 years old.
• The policy will start with commercial vehicles first and then be expanded to private vehicles later.
• Criteria to determine vehicle fitness will primarily be emission tests, braking, safety equipment, among many other tests which are as per the Central Motor Vehicle Rules, 1989.
• Rules for fitness tests and scrapping centres to be applicable from October 1, 2021, while scrapping of government and PSU vehicles which are older than 15 years to come into effect from April 1, 2022.
• Old vehicles need to pass a fitness test before re-registration and such testing would take place at the Automated Fitness Centres and the fitness test of the vehicles will be done in conformity with international standards.
• Fitness tests would be mandatory after 20 years for personal vehicles, while commercial vehicles would require it after the completion of 15 years.
• The mandatory fitness testing for heavy commercial vehicles to be in force from April 1, 2023, and the same will be in place in a phased manner for other categories from June 1, 2024.
• Increased fees for fitness certificate and test to be applicable for commercial vehicles 15 years onwards from the date of initial registration and incase of failure to get the fitness certificate, such vehicles to be de-registered.
• Increased re-registration fees to be applicable for private vehicles 15 year onwards from the date of initial registration. Such vehicles to be de-registered after 20 years if found unfit or in case of a failure to renew the registration certificate.
• A vehicle failing the fitness test or failing to get a renewal of its registration certificate to be declared as 'End of Life Vehicle'

Benefits to be received after scrapping the vehicle

Under the new policy, a certificate will be issued on the scrappage of old cars, which will ensure that the owners get a discount on the purchase of new cars and benefit fees. Some of the benefits are as follows: -

• A scrap value of the ex-showroom price of vehicle ranging from 4-6% will be given to the owner if they choose to scrap the vehicle
• A rebate of upto 25% will be given in Road Tax
• Vehicle manufacturers will be advised to give 5% discount on new vehicles against a scrapping certificate
• No registration fees for vehicles.