PM Modi launches vehicle scrappage policy
16 August 2021
Prime Minister Narendra Modi on Friday launched the much-talked-about vehicle scrappage policy under which private vehicles will be de-registered after 20 years if found unfit or in case of failure to renew registration. Enhanced re-registration will be applicable on private vehicles from the 15th year of original registration.
Modi said the launch of Vehicle Scrappage Policy today is a significant milestone in India’s development journey.
In a series of tweet, the prime minister said: "The launch of Vehicle Scrappage Policy today is a significant milestone in India’s development journey. The Investor Summit in Gujarat for setting up vehicle scrapping infrastructure opens a new range of possibilities. I would request our youth and start-ups to join this programme.
“Vehicle scrapping will help phase out unfit and polluting vehicles in an environment friendly manner. Our aim is to create a viable circular economy and bring value for all stakeholders while being environmentally responsible."
The Investor Summit in Gujarat for setting up vehicle scrapping infrastructure opens a new range of possibilities. I would request our youth and start-ups to join this programme.
As per government estimates, there are around 5.1 million light motor vehicles or LMVs older than 20 years in India and around 3.4 million LMVs older than 15 years.
In May this year, union road transport minister Nitin Gadkari announced the policy on phasing out old and defective vehicles. The fleet modernisation programme of the government aims to achieve multiple goals like reduction in air pollution, the fulfilment of India's climate commitments, improving road and vehicle safety, better fuel efficiency, and boosting the availability of low-cost raw materials for auto, steel and electronics industry.
Those opting for the scheme will get scrap value of the old vehicle at the scrappage centre, which is about 4-6 per cent of the ex-showroom price of new vehicles and will get a road tax rebate of up to 25 per cent on personal vehicles and up to 15 per cent on commercial vehicles. They can also avail of a 5 per cent manufacturer discount against the scrapping certificate and also a waiver in the registration fee.
The scheme aims to cut 25-30 per cent vehicular air pollution and ensure better fuel efficiency. As the old vehicles will vanish from the road, the service and manufacturing industry will get a boost with an increase in demand for new vehicles.
The government has set some deadlines to ensure the effects of the scheme on the ground could be seen as early as possible. Rules for fitness centres and scrapping centres will come into effect from 1 October. While scrapping of government vehicles over 15 years can be done by 1 April 2022, heavy CVs and other category vehicles must be mandatorily tested fitness by 1 April 2023, and 1 June 2024, respectively.