Vehicles Scrappage Policy launched: All rules and benefits explained in 6 points

Prime Minister Narendra Modi launched the much-awaited Vehicle Scrappage Policy on Friday. Here is all you need to know about the rules and benefits of the scrappage policy. PM Modi said the policy will help phase out unfit and polluting vehicles in an environment-friendly manner during the video address. He said vehicles will not just be scrapped by their age but also if they are found to be unfit in automated testing.

Vehicles Scrappage Policy launched: All rules and benefits explained in 6 points
The Vehicle Scrappage Policy is expecged to systematically phase out old and unfit cars.

Prime Minister Narendra Modi launched the Vehicle Scrappage Policy while virtually addressing the Gujarat Investor Summit on Friday.

PM Modi said the policy will help phase out unfit and polluting vehicles in an environment-friendly manner during the video address. He said vehicles will not just be scrapped by their age but also if they are found to be unfit in automated testing.

"The launch of Vehicle Scrappage Policy today is a significant milestone in India’s development journey. 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," PM Modi said.

WHAT IS THE VEHICLE SCRAPPAGE POLICY?

As the name suggests, the policy will help in phasing out old, unfit vehicles. The scrappage policy will come into effect immediately after the registration period of a vehicle is over; it would then have to undergo a mandatory fitness test. As per motor vehicle laws in the country, a passenger vehicle has a life of 15 years and commercial vehicles have a lifespan of a decade. Vehicles plying on the roads beyond these durations are considered to pollute the environment at a greater pace compared to newer cars. They are likely to feature old technology, making them unsafe for usage on roads. The vehicles also consume more fuel compared to newer vehicles. The policy will help individuals dump their old vehicles systematically and even offer incentives.

It is an important policy as older vehicles pollute the environment 10-12 times more than fit vehicles. There are roughly 51 lakh light motor vehicles that are older than 20 years and 34 lakh light motor vehicles that are older than 15 years. In addition, around 17 lakh medium and heavy commercial vehicles are older than 15 years without a valid fitness certificate, according to Union minister Nitin Gadkari.

WHAT THE POLICY AIMS TO ACHIEVE?

The objective of the Vehicle Scrappage Policy is simply to phase out and recycle old vehicles through a systematic process. The ultimate goal of the policy is to reduce environmental pollution caused by old vehicles that have surpassed their lifecycle and run without a valid fitness certificate. At the time of announcing the policy during the Union Budget 2021, Finance Minister Nirmala Sitharaman said the scrapping of old vehicles would result in more benefits than just reducing air pollution. Recycling old vehicles will help in reusing key materials like steel, plastic, and copper. This will result in reducing the cost of manufacturing. The policy also aims to provide a boost to vehicle sales in the country, given the incentives offered for buying a new car.

WILL ALL VEHICLES BEYOND THE LIMIT BE SCRAPPED?

No, not all vehicles that have run beyond 15 years — in the case of personal vehicles — and 10 years — in the case of commercial vehicles — will be scrapped. After completion of the limits, vehicles will have to undergo a mandatory fitness test, which would determine if it is fit to run or not. If the vehicle fails a fitness test, it will not get a renewal certificate and will not be able to ply on roads. If a vehicle passes the fitness test, it will get a renewal certificate and would have to undergo a fitness test every five years. At any point when the vehicle fails the fitness test, the car will become ineligible to run on the roads as the owner will not get a renewed registration certificate.

WHAT IS THE FITNESS TEST PROCESS?

As mentioned earlier, the fitness test will determine if an old car is fit to run beyond its technical lifespan. Simply put, a fitness test is a detailed examination that will determine the roadworthiness of a vehicle. It will also check whether the vehicle is causing a greater level of environmental pollution. But that’s not all. As part of the fitness test, an old car will also have to undergo a series of safety examinations including braking, engine performance, and other tests. All fitness tests will be conducted at automated fitness test centers, which are believed to make the process extra stringent. For instance, even if the vehicle has misaligned headlamps or if the headlamps are not powerful enough, the computer will give it a ‘fail’.

WHAT HAPPENS AFTER THE CAR FAILS A FITNESS TEST?

If a vehicle fails the fitness test, it will be deemed ‘EOLV’ or End of Life Vehicle. Simply put, the owner will be given an option to scrap the vehicle at RVSFs or Registered Vehicle Scrapping Facilities. It is still not clear whether the owner will get a chance to rectify the issues and reappear for the test. But reports suggest that a vehicle will be eligible for the fitness test three times, following which the vehicle will be considered EOLV.

WHAT WILL BE THE BENEFITS?

Owners who scrap their old vehicle and plan to buy a new one will get incentives as part of the Vehicle Scrappage Policy. A value of the ex-showroom price of the old vehicle, ranging from 4 percent to 6 percent, will be given to the owner when they choose to scrap the car. A rebate of up to 25 percent of road tax will be given to a person when he buys a new personal vehicle after scrapping an old one; the rebate will be up to 15 percent for commercial vehicles. In addition, vehicle manufacturers have been advised to give a 5 percent discount on new vehicle purchases to individuals who produce a scrapping certificate and a waiver on the registration fee.

While PM Modi launched the Vehicle Scrappage Policy today, the implementation will take some time. The tentative date for the implementation of the policy is October 1, 2021. Meanwhile, scrapping of government and PSU vehicles above 15 years will be undertaken from April 1, 2022.