PM Modi launches Vehicle Scrappage Policy. Here are key features
What's the story
Prime Minister Narendra Modi today launched the National Vehicle Scrappage Policy, aiming to phase out unfit and polluting vehicles. Urging start-ups to join the initiative, he said the policy will provide a new identity to India's mobility sector and promote a circular economy. Stating the policy is a "significant step," the PM said it would bring in investments worth Rs. 10,000 crore.
Details
What is the Vehicle Scrappage Policy?
The Vehicle Scrappage Policy aims to create an ecosystem for phasing out old and polluting vehicles in an environment-friendly way. According to the Ministry of Road Transport and Highways (MoRTH), 17 lakh old medium and heavy commercial vehicles were plying on Indian roads as of April 2021. Earlier, MoRTH had also proposed a hike in the renewal fees of registration certificates of 15-year-old vehicles.
Information
Government plans to create a scrapping infrastructure
The government will create a scrapping infrastructure in the form of Automated Testing Stations and Registered Vehicle Scrapping Facilities across the country. It plans to set up registered scrapping centers, which will provide the owners with a scrapping certificate upon getting their old vehicle scrapped.
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Incentives for owners of old vehicles
The policy says the scrap value for an old vehicle will be around 4-6% of the ex-showroom price of the new vehicle. It provides a discount of 5% on the purchase of a new vehicle upon getting the old vehicle scrapped. It further proposes a road-tax rebate of up to 25% for personal vehicles and up to 15% for commercial vehicles against scrapping certificates.
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Compulsory fitness test for all vehicles
The new policy proposes that a fitness test is compulsory for all vehicles. It mandates that personal vehicles will be needed to undergo fitness tests after 20 years, whereas commercial vehicles would require it after 15 years. If a vehicle fails the fitness test or fails to get a renewal of its registration certificate, it may be declared as an End of Life Vehicle.
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When will mandatory fitness testing start?
Mandatory fitness testing of commercial vehicles is likely to start from April 1, 2023. For personal vehicles, on the other hand, it is expected to commence from June 1, 2024, in a phased manner, according to the policy.
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Increased re-registration fees for personal vehicles after 15 years
The policy proposes that personal vehicles will be de-registered after 20 years if found unfit or in case of a failure to renew the registration certificate. Further, increased re-registration fees will be applicable for personal vehicles 15 years onward from the initial registration date. However, the registration fees may be waived for the purchase of a new vehicle against the scrapping certificate.