In a move to generate wealth from waste, Prime Minister Modi launched the National Automobile Scrappage policy via video conferencing during the Investor Summit in Gujarat on 13 August 2021. He urged the youths of the country and startups to join the programme.
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 & start-ups to join this programme.
— Narendra Modi (@narendramodi) August 13, 2021
"The policy will give a new identity to India in the mobility and auto sector. It will play a major role in removing unfit vehicles from our roads in a scientific manner. It will modernise the vehicular population on our city roads,” said Prime Minister Modi.
He added that the policy will help in phasing out unfit and polluting vehicles in an environment-friendly manner and help modernise the vehicle fleet, along with the scientific disposal of old polluting vehicles.
It is to be noted that the Centre is promoting a circular economy with an aim to develop a sustainable and environment-friendly front. In a circular economy, products are designed for durability, reuse and recyclability.
Speaking on the occasion, Union Minister Nitin Gadkari said that around 1 crore vehicles in the country are without any valid fitness and around 99% of metal waste can be done with regular scrapping. It will also bring down the cost of raw materials by approximately 40%, reduce the cost of components and increase our competitiveness in the international market.
Glimpses of the Launch of National Automobile Scrappage policy in Gandhinagar, Gujarat. #CircularEconomy pic.twitter.com/00Ih7OX15f
— Nitin Gadkari (@nitin_gadkari) August 13, 2021
He added that the policy is based on fitness and not the age of vehicles. As per an estimate, the Centre will get a profit of Rs. 30,000-40,000 crores in GST while the State Governments will also get a profit of Rs. Rs. 30,000-40,000 crores in GST.
Vehicle Scrappage Policy
During her Budget 2021-22 speech, Finance Minister Nirmala Sithraman announced the Vehicle Scrappage Policy to bring about transformational reforms in the automobile sector.
Introduced in Lok Sabha on 18 May 2021 by Union Minister Nitin Gadkari, the Vehicle Scrappage Policy aims at creating an eco-system to phase out old, unfit and polluting vehicles.
Aim of Vehicle Scrappage Policy
The vehicle scrapping policy is aimed at building an eco-system to phase out unfit and polluting vehicles in an environmentally friendly and safe manner. It further intends to create scrapping infrastructure in the form of Automated Testing Stations and Registered Vehicle Scrapping Facilities pan India.
Implementation of Vehicle Scrappage policy
Heavy commercial vehicles will undergo mandatory fitness tests starting 1 April 2023 while the private vehicles will be included in the mandatory fitness test criteria from 1 June 2024, in a phased manner.
It is to be noted that private vehicles will be de-registered after 20 years while commercial vehicles will be de-registered after 15 years, provided they fail to comply with the fitness requirements.
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Vehicle Fitness Test Criteria
Although vehicle scrapping is voluntary, the policy states that it is mandatory for all vehicles to undergo fitness tests once their registration cycle is over.
If a vehicle fails the fitness test, owners will get two more chances to pass, failing which the vehicle will be mandatorily scrapped as it will not be issued a renewed registration certificate and an unregistered vehicle is illegal to run on the road.
If a vehicle passes the fitness test even if its registration cycle is over, it will have to undergo fitness tests every five years to continue to run on the road.
Renewal of registration
Fitness centres pan India will test vehicles on certain parameters including emission of harmful gases, air-polluting particles, engine performance and brake tests. The owners of the vehicles will have to pay the fees for re-registration.
Green Tax
The vehicles passing the fitness test will have to pay Green Tax during re-registration. The tax will vary from state to state and will depend on the fuel type and the vehicle. Vehicles such as EVs and alternate-fuel models that use CNG, ethanol and LPG will be exempted altogether.
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Investor Summit 2021Jointly organised by the Government of Gujarat and the Ministry of Road Transport and Highways, Investor Summit 2021 aims to attract investment for setting up the vehicle scrapping infrastructure. The event saw the participation of various Central and State Government Ministers, along with potential investors and industry experts. It focused on the synergies presented by the ship-breaking industry at Alang, for the development of an integrated scrapping hub. |
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