Governance
Vehicle Scrapping Policy
- 19 Mar 2021
- 4 min read
Why in News
Recently, the Union Road and Transport Minister announced the Vehicle Scrapping Policy in the Lok Sabha.
- It was first announced in the Union Budget for 2021-22.
- The policy is estimated to cover 51 lakh Light Motor Vehicles (LMVs) that are above 20 years of age and another 34 lakh LMVs above 15 years of age.
- India will also implement a Global Positioning System (GPS)-based toll collection system and do away with all toll booths within a year.
Key Points
- Aim:
- Reducing the population of old and defective vehicles, bringing down vehicular air pollutants, improving road and vehicular safety.
- Provisions:
- Fitness Test:
- Old vehicles will have to pass a fitness test before re-registration and as per the policy government commercial vehicles more than 15 years old and private vehicles which are over 20 years old will be scrapped.
- Old vehicles will be tested at the Automated Fitness Center and the fitness test of the vehicles will be conducted according to international standards.
- Emission test, braking system, safety components will be tested and the vehicles which fail in the fitness test will be scraped.
- The Ministry has also issued rules for registration procedure for scrapping facilities, their powers, and scrapping procedure to be followed.
- Road Tax Rebate:
- The state governments may be advised to offer a road-tax rebate of up to 25% for personal vehicles and up to 15% for commercial vehicles to provide incentive to owners of old vehicles to scrap old and unfit vehicles
- Vehicle Discount:
- Vehicle manufacturers will also give a discount of 5% to people who will produce the 'Scrapping Certificate' and registration fees will be waived off on the purchase of a new vehicle.
- Disincentive:
- As a disincentive, increased re-registration fees would be applicable for vehicles 15 years or older from the initial date registration.
- Fitness Test:
- Significance:
- Creation of Scrap yards:
- It will lead to creation for more scrap yards in the country and effective recovery of waste from old vehicles.
- Employment:
- In the new fitness centers, 35 thousand people will get employment and an investment of Rs 10,000 crores will be pumped in.
- Improved Revenue:
- This will boost sales of heavy and medium commercial vehicles that had been in the contraction zone as a result of economic slowdown triggered by the bankruptcy of IL&FS (Infrastructure Leasing & Financial Services) and Covid-19 pandemic.
- The government treasury is expected to get around Rs 30,000 to 40,000 crores of money through Goods and Services Tax (GST) from this policy.
- Reduction in Prices:
- Prices of auto components would fall substantially with the recycling of metal and plastic parts.
- As scrapped materials will get cheaper the production cost of the vehicle manufacturers will also reduce.
- Reduce Pollution:
- It will help improve fuel efficiency and reduce pollution.
- As older vehicles pollute the environment 10 to 12 times more, and estimated that 17 lakh medium and heavy commercial vehicles are more than 15 years old.
- It will help improve fuel efficiency and reduce pollution.
- Creation of Scrap yards:
- Other Initiatives to Curb Vehicular Pollution:
