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Funded by the government, this programme aims to scrap old vehicles and replace them with newer vehicles on Indian roads. The primary goal of the policy is to create a system for phasing out dangerous and polluting vehicles.
This will help achieve a lesser amount of pollution and a reduced carbon footprint in the country. The Vehicle Scrappage Policy has several benefits. These include improved air quality, higher demand for safer and environmentally friendly automobiles, opportunities in the metal recycling business, etc.
The Vehicle Scrappage Policy is an initiative funded by the government to replace outdated automobiles with new and modern vehicles. The policy was introduced on 13th August, 2021. The goals of the scrappage policy are to:
Lower emissions
Provide employment possibilities
Increase the demand for new cars
In order to strengthen automotive sectors and reduce vehicular pollution, a number of nations have also implemented car scrappage programmes. Many developed and developing countries, including Germany, the US, Canada and China, are part of this league.
As a result of this policy, major automobile manufacturers have built scrappage centres. These include:
Mahindra & Mahindra's CERO
Maruti Suzuki and Toyota's Maruti Suzuki Toyotsu
This also helps the "Green India" initiative by making room for a fleet of cleaner automobiles.
According to the Indian government’s auto scrappage policy, the authorities will phase out the following vehicles:
Any commercial vehicle and passenger car more than 15 and 20 years old, respectively
A vehicle that fails the emissions and fitness tests
The policy also mandates a standard operating procedure to dispose of unsuitable automobiles.
This policy is not just expected to safeguard the environment from carbon emissions but also help the troubled Indian automobile sector. Even before the COVID-19 pandemic, the industry was witnessing disappointing trends in sales charts.
The pandemic made the situation worse. As a response, the Government of India announced the vehicle scrap policy. The phasing out of older vehicles will generate a renewed demand for automobiles.
Read below to learn about the key highlights of the vehicle scrapping policy:
The policy aims to phase out older automobiles to curb vehicular pollution
Ministry of Road Transport & Highways (MoRTH) is the nodal agency for its implementation and framing of rules and regulations.
The government will provide certain benefits to owners of scrapped vehicles
Owners of scrapped vehicles will move towards eco-friendly and modern automobiles.
Now that we know about the scrappage policy, here are some of the potential benefits of this vehicle scrappage policy. The policy is expected to have a positive effect on the environment, economy, automobile owners and the auto industry.
Air pollution will reduce, and air quality will improve when unsuitable cars are scrapped. It is expected that more environment-friendly and less polluting cars (like electric cars) will take their place
The age of more than 50 lakh private and commercial light motor vehicles is over 20 years old. As old cars are scrapped and replaced with new vehicles, there will be greater demand for new automobiles and boost the Indian auto industry
Overall, the scrappage policy will help the economy by creating additional work opportunities. For instance, new automobile scrapping facilities will require a workforce, creating more employment opportunities
New and technologically improved cars will be considerably safer. For instance, modern automobiles have better safety measures
In addition to all this, the owners of the scrapped vehicles will get a ton of benefits as well. Some examples of the benefits of vehicle scrappage policy for the owners are as follows:
For commercial and personal automobiles, states may offer a road tax credit of up to 15% and 25%, respectively
Owners of scrapped vehicles will be compensated with a scrap value anywhere between 4-6% of the ex-showroom cost of the new automobiles.
There will not be any registration costs for a newly acquired car if the owner possesses a certificate.
According to a notification released by MoRTH in April 2022, the cost of renewing the registration of personal and commercial vehicles is now higher. For any vehicle older than 15 years, you may have to pay 8 times more to register an older car than the current rate.
There is a penalty of ₹300 each month if the registration renewal of personal automobiles is postponed. The fine for postponing commercial vehicle registration renewal is ₹500 per month, and the delay fee for the renewal of a fitness certificate is ₹50/day.
In all likelihood, mandatory testing for personal automobiles will begin in June 2024, albeit gradually. However, testing for commercial cars is anticipated to start in April 2023.
MoRTH has classified vehicles into four categories in the scrap vehicle policy, which include:
These vehicles will be put through a fitness test once 15 years have elapsed. They will be permitted to operate if they clear this test. If not, they will be scrapped in accordance with the guidelines for commercial vehicles.
Beginning on 1st April, 2022, the government has put this policy into effect. All cars used by the state and Central governments older than 15 years will be subject to vehicle scrappage.
These vehicles will be tested after 15 years and only be permitted to operate on the roads if they clear this fitness test.
Due to their high maintenance and seldom use, vintage cars are exempt from India's policy on vehicle scrappage.
The fitness test for vehicle scrappage will determine whether or not your vehicle can stay on the road.
This test is basically a vehicle inspection that determines whether or not your vehicle is fit to drive on the road. The assessment will also determine whether or not the automobile is emitting pollutants beyond permissible limits.
Not only that, but the automobile also has to pass a number of other technical evaluations, including the engine's performance, brakes, and many more. These fitness evaluations will be performed in automated facilities.
The new fees for renewing vehicle registration, as informed by the MoRTH notification in 2022, are as follows:
Metric |
Vehicle category |
Current fee structure |
Revised fee structure |
Renewal or issuance of Registration Certificate (RC) |
Two-wheelers |
₹300 |
₹1,000 |
Light Motor Vehicle (LMV) - non-transport |
₹600 |
₹5,000 |
|
Imported cars |
₹15,000 |
₹40,000 |
|
Fitness test for issuance of new or renewal of Fitness Certificate (FC) - Vehicles older than 15 years |
Light Motor Vehicle (LMV) - non-transport |
₹600 |
₹1,000 (Automated Testing Station) |
Taxis |
₹1,000 |
₹7,000 |
|
Trucks and Buses |
₹1,500 |
₹12,500 |
If you keep using an older vehicle, these are some disadvantages to note:
The costs of renewing a fitness certificate for commercial and private vehicles may rise significantly. This will make it more expensive to maintain those automobiles that are older than 15 years
States will also levy a green tax on top of the road charge that must be paid
Lastly, the owners of older vehicles will also miss out on the advancements made in the auto industry. Features like vehicle safety and fuel efficiency have all been improved over the years
The vehicle scrappage policy will undoubtedly lessen the rising pollution and promote safer automobiles on the road. Similar to how it is risky to use cars that are deemed unsuitable and unregistered by the policy, driving uninsured vehicles is also not advised.
In the event of an accident, driving an uninsured vehicle might put you in financial difficulty and legal issues. So, instead of delaying, look through the car insurance plans on Bajaj Markets and get affordable premium rates right now.
The vehicle scrappage policy was introduced on 13th August, 2021. It is being implemented in phases.
There are multiple benefits for vehicle owners under the vehicle scrappage policy. For the owners of commercial and personal automobiles, states may offer a road tax credit of up to 15% and 25%, respectively.
The owners of scrapped vehicles will also be compensated with a 4-6% scrap value of the ex-showroom cost of the new car. The owners of scrapped vehicles will be exempted from paying registration costs for a newly acquired car.
The aim of the vehicle scrappage policy is to reduce carbon emissions from old vehicles and boost the auto industry with renewed demand.
To avail benefits under this scheme, you need to get your car scrapped from a registered scrapping centre. The scrapping centre will inspect and verify your vehicle on the VAHAN database to proceed with the scrapping.
When completed, the centre will also provide you a scrappage certificate and agreed scrap value.
This test will be a vehicle inspection that determines your car’s safety, emission levels, engine’s performance, brakes, etc.
Your vehicle will have to go through a fitness test when its registration cycle is complete.
Yes, this scheme is applicable to diesel and petrol vehicles.
The Ministry of Road Transport and Highways (MoRTH) is associated with the vehicle scrappage policy.