What is India’s Vehicle Scrappage Policy? All you need to know about the Voluntary Vehicle-Fleet Modernization Programme

New Delhi: India introduced Vehicle Scrappage Policy for old and unsafe vehicles in 2021. Finance Minister Nirmala Sitharaman announced the policy in Union Budget 2021. Later, on 18 March 2021, Minister for Road Transport and Highways Nitin Gadkari announced the extensive insights about the scheme. This was a step forward for green India and to curb urban Pollution. The policy aims to phase out vehicles more than 15-20 years old and encourage the purchase of new vehicles.

The scheme will chip in for organizing the scattered and nebulous vehicle scrappage methods. It is also expected to boost to lower car sales post-Covid'19. Several other countries have already implemented this policy, making India fall behind them.

The following questions and answers give all that you need to know about the Voluntary Vehicle- Fleet Modernization Programme.

Vehicle Scrappage Policy

Q: What is the vehicle scrapping policy in India?

A: The policy states that commercial vehicles over 15 years old and passenger vehicles over 20 years old must be tested for fitness and emissions. The policy checks brake quality, engine performance, and various other factors, after which it is determined whether or not the car is unimportant. Under the policy, automated testing stations and provisions for vehicle scrapping will be established in phases.

Q: What is the aim of the vehicle scrapping policy?

  • The purpose of this policy is to:-
  • Curb pollution by scrapping 1 crore vehicles without any fitness and qualified registration.
  • Improve vehicle safety.
  • Improve fuel efficiency and minimize maintenance costs for vehicle owners.
  • Improving auto sector sales and enhancing job opportunities.
  • Enhancing the availability of low-cost materials for the steel, electronics and automotive industries.

Vehicle Scrappage Policy

Q: What are the incentives provided for scrapping old vehicles?

A: The government has offered incentives to scrap old vehicles and to buy new ones. They include:-

  1. Car manufacturers can offer up to 5% discount on new car purchases.
  1. The buyer gets a registration fee waiver for new vehicle purchase.
  1. Vehicle owners may be provided with a scrap value equivalent to 4-6% of the ex-showroom price of the new vehicle.
  1. The state may offer a refund of up to 25% and 15% of the road tax for personal and commercial vehicles, respectively.

Q: What is a vehicle fitness check and what will happen if a vehicle fails the test?

  1. All vehicles are registered with a fitness certificate. CVs have to undergo the fitness test after every two years for the first 8 years and annually thereafter. For a PV, the first registration is valid for 15 years and the renewal is valid for 5 years.

From April 1, 2023, it is proposed that the CV fitness test will be compulsory only through Automated Testing Stations (ATS). While for all other CVs and PVs, aptitude tests through ATS are suggested to be mandatory from 1st June 2024.

If the vehicle fails the Vehicle Fitness Test or the Automated Fitness Test, a new test will be made available after necessary repair and re-inspection. This is valid if applications are received from an appellate authority.

Vehicle Scrappage Policy

Q: What is the SIAM Recommendation?

  1. SIAM has requested the government to permit dealership workshops to serve as certification and inspection stations. This was recommended because the creation of new policies could delay the entire policy development and implementation process.

Q: How to determine the value of your vehicle?

A: The price of the car depends on the weight of the car to be scrapped. Normally INR 15 per kg of metal parts. It is more beneficial to the seller if the vehicle is in running condition, as he can sell parts for the vehicle and get a higher price for the vehicle.

Q: What documents do you need to submit when scrapping your vehicle?

  1. To scrap your vehicle at the authorized scrapper, you must first submit a copy of the RC, a fitness certificate stating your vehicle is not valid, bank account details (where you want the payment to be deposited), PAN cards, crossed cheque of the same account, and a proof of being the car owner. In the vehicle owner is death then submit the owner's death certificate.

Q: What other countries have introduced Vehicle Scrappage Policy?

A: The United States, Germany, Canada and China are some of the countries which have introduced vehicle scrapping policy to boost their automobile industry.

Also Read: Prices of SUVs and MPVs to go up 2% following the GST cess increase

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