NEW DELHI: Union transport minister Nitin Gadkari on Thursday finally announced the finer details of the long-awaited Vehicle Scrapping Policy. As expected, the policy proposes to de-register commercial vehicles after 15 years and private vehicles after 20 years if they fail to pass an automated fitness test.
Gadkari also announced incentives for those opting to scrap their old vehicles.
The scrap value will be around 4-6 per cent of the ex-showroom price of a new vehicle and the government will advise manufacturers to provide a discount of 5 per cent on new vehicles if the buyer produces a scrapping certificate. State governments will also be advised to offer a road- tax rebate of up to 25 per cent for personal vehicles and up to 15 per cent for commercial vehicles.
Registration fees may also be waived for new vehicles against a scrapping certificate. Vehicles that fail to get a fitness certificate will be de-registered and scrapped. As a disincentive measure, the policy proposes increased fees for fitness certificates and tests for vehicles 15 years past their intial registration date.
Government and PSU-owned vehicles will be automatically scrapped after 15 years.
However, vintage cars will be kept out of the policy’s ambit. According to government estimates, there are 51 lakh light motor vehicles that are older than 20 years and 34 lakh light motor vehicles that are older than 15 years. Around 17 lakh medium and heavy commercial vehicles older than 15 years lack a valid fitness certificate.
According to Gadkari, the ecosystem is expected to attract additional investments of around Rs 10,000 crore and 35,000 job opportunities due to the policy. Auto industry association SIAM noted that the most important step would be to build infrastructure for testing and scrapping rapidly and that they would work with the Centre this front. Such centres are non-existent at present. Rules for fitness tests and scrapping centres will come into effect from October 1, 2021.Meanwhile, mandatory fitness testing for HCVs will start from April 1, 2023, and for categories from June 1, 2024.