New Scrappage Policy In India

New Scrappage Policy In India

Scrappage policy “Voluntary vehicle-fleet modernisation programme” or vehicle scrappage policy, unveiled in the march has now been launched. A look at how this policy is important for the economy, environment and employment. The policy will be in action for personal cars from 2024 while for heavy trucks it will come into action from 2023.

What is Scrappage Policy

As per motor vehicle laws in the country, passenger vehicles have a life of 15 years and commercial vehicles have a life of 10 years. Vehicles on the roads beyond this duration consume more fuel compared to newer vehicles and pollute the environment 10- 12 times more than fit vehicles. According to policy, vehicles beyond their lifespan will have to go through automated fitness testing and if found to be unfit, they will be scrapped at scrappage centre followed by deregistration and if not, they will be given a renewal certificate and would have to undergo a fitness test every five years.

Implementation of Policy

There is time to set up vehicle testing scrap yards before civilians can get benefit from the policy as the policy will first be implemented for government-owned vehicles. ” We propose to scrap vehicles, which are 15 years and over, owned by the central and state governments by April 2022,” said Giridhar Aramane, secretary in the road transport and highway ministry. From 2023 onward, we scrap heavy commercial vehicles if they fall into the category prescribed for vehicles that failed the fitness test and road worthiness. We are aiming to implement this policy on personal vehicles from June 2024 onward.


The Policy Aims

It has been in work since 2015, aims to scrap old, unfit and polluting vehicles off the road. With the announcement of the vehicle scrappage policy, the government aims to generate 35,000 jobs and attract Rs.10,000 crore investment. It will provide incentives to the owners of misfit (according to the rules prescribed in the policy) vehicles along with making the roads cleaner and less polluting. It will reduce the cost of raw materials for manufacturers, reducing the cost of production. The policy has the potential to cut down the cost of raw materials by 40 per cent. This could eventually lead to a reduction in prices of vehicles for customers, said Union minister for road transport and highways, Mr Nitin Gadkari Those who are planning to buy new vehicles in the coming years can expect some rationalization in prices of vehicles. Though the extent of benefit manufacturers would pass onto customers can’t be said. Association of manufacturers in the policy is going to offer some discount on the purchase of new vehicles and certificate of deposit for the scrapped vehicles, said Giridhar Aramane, secretary in the ministry of road transport and highways.


According to reports, this policy will result in benefits for several sectors and will help generate jobs for people at vehicle fitness centres and shipyards. This policy is a perfect win for creating employment, reducing pollution, reducing raw material cost and resulting in benefits for various stakeholders. One of the opportunities that will be generated from the vehicle scrappage policy will be the metal recycling business. Implementation of the scrappage policy will have India its organised scrappage industry. Through automated scraping, centre vehicles will be deregistered before scrapping with the help of regional transport offices ( RTOs) which will provide true records of vehicles along with reducing raw material production and availability of rare metals. People who decide to scrap their vehicle and buy a new one will be given incentives as a part of the policy. A rebate ranging from 4 to 6 % off the total price will be given to the owner if they decide their vehicle to go for scrapping. A rebate of 25 per cent of road tax to a person when he buys a new personal vehicle after scrapping an old one and a rebate of 15 per cent in case of a commercial vehicle. In addition, vehicle manufacturers have been advised to give a 5 % discount on new vehicle purchases to one who shows a scrapping certificate and the registration fee will be waived off.


What’s the process?

Vehicle owners should approach an authorised scrap dealer for scrapping. Scrap dealers have to ensure that the vehicle is disposed of safely without causing any negative impact on the environment. In addition, owners should also make sure that their vehicle has been scrapped and gone for recycling. This will prevent his vehicle to be used for any unauthorised use for any illegal activity as this might land the owner into trouble since the vehicle is registered in his name. The vehicle owner should also inform the authorised local RTO office that his old vehicle has been scrapped and gone for recycling so that they can deregister his vehicle from the records.

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