Prime Minister Narendra Modi launched a long-awaited vehicle scrap policy on August 13, 2021. The policy will be implemented on private and commercial vehicles that are more than 15 and 20 years old. Vehicles’ condition would be judge by undergoing a fitness test. Prime Minister Narendra Modi represents it (National Automobile Scrappage Policy) as a remarkable step towards “Atmanirbhar Bharat Abhiyaan”. Speaking at the moment, Union Minister Nitin Gadkari said that around 1CR vehicles in the country are without any valid fitness certificate, and around 99% of metal waste while regular scrapping is done.
In a move to produce wealth from scrap, Prime Minister Modi launched the National Automobile Scrappage policy via video while virtually addressing the Investor Summit in Gujarat on 13 August 2021. Earlier, the policy was announced by Union finance minister Nirmala Sitharaman in her Budget speech in February. The main purpose of the launched policy is to make India clean, Congestion Free & Convenient Mobility. It will create many jobs and will help to boost up Indian economy as well. Fitness tests are important to know the quality of the vehicle, whether the vehicle is still fit to run or road, or its impact on our environment. The vehicle fitness test will conduct by trained industry experts and automated testing centers. The vehicle will be declared fit or unfit after conducting tests like brake applying test, engine performance, and internal parts performance. If the vehicle passes the fitness test, the same process will be done after 5 years to check all required parameters.
Holding vehicles older than 15 years will become costly, as the cost for renewal vehicle fitness certificates might go up to by 62 times for commercial vehicles and 8 times for private vehicles. States will also apply a green tax over and above the road tax that every vehicle owner needs to pay. Personal vehicles that are older than 20 years, their registration will be canceled from June 1, 2024, if they fail the automated fitness test or their registration certificate has not been renewed. Likewise, heavy commercial vehicles older than 15 years will be de-registered from April 1, 2023. Govt planning to open 75 testing stations in phase 1 and then it will be scaled up to 450-500 later across the country.
Government encouraging big private players to work with state govt by applying PPP model. Nitin Gadkari also said that policy will be beneficial for all stakeholders it will boost up manufacturing, create employment and increase our savings. The manufacturing cost of the new vehicle will also come down as the scrap would provide essential elements like copper, steel, aluminum, plastic & rubber to industry, ‘Gadkari’ added. If recycle continuously, we can recover 90% of the material and it will help to reduce our raw material cost by around 40 percent, it will help to a reduction in price and higher sales, said the minister. Read below and understand the policy in detail:-
- The policy suggests ‘fitness tests’ for private and commercial vehicles which are more than 15 and 20 years sequentially. If you don’t have the ‘fitness report’ registration of such vehicles will be automatically canceled.
- The policy proposes mandatory scrapping of all government vehicles that are more than 15 years old but is applicable only on four-wheelers.
- The fitness tests will be applied at government-certified fitness centers, anyone can book their test slot by applying online. The test report will be generated online but scrappage can be done anywhere in the country, regardless of the place of vehicle registration. Just need to show the test report to the certified scrappage centers.
- The scheme also brings forward several incentives which the owners can avail themselves of after being given a scrapping certificate. The incentive scheme includes the scrap value for the old vehicle, which is approximately around 5-6% of the price of a new vehicle.
- Scrappage policy also contains a road tax rebate of up to 25% for newly purchased personal vehicles and 15% for newly purchased commercial vehicles. An additional 5% discount against the scrapping certificate, has also been proposed under the policy.
- If anybody purchases a new vehicle, the registration fees may also be waived upon getting the old vehicle scrapped.
- The policy will bring huge investments worth more than ₹10,000 Cr and will create above 50k jobs simultaneously, Union transport minister Nitin Gadkari had said while announcing details of the policy, in March.
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