At the formal launch of the National Automobile Scrappage Policy at an Investor Summit in Gujarat’s Gandhinagar on 13 Aug’21, Prime Minister Narendra Modi described it as a key step towards ensuring self-sufficiency in domestic manufacturing.
He hailed the endeavour for setting up a vehicle scrapping infrastructure as a “milestone” which opened a “new range of possibilities”.
“Vehicle scrapping will help phase out unfit and polluting vehicles in an environmentally friendly manner,” he stated at the summit held online. It will augment India’s efforts to emerge as a “viable, circular economy”, he opined.
The policy recommends “fitness tests” for private and commercial vehicles that are more than 20 and 15 years old respectively. In the absence of a “fitness certificate,” registration of such vehicles will stand to be automatically cancelled.
It further recommends mandatory scrapping of all government vehicles that are more than 15 years old; however, this is applicable only to four-wheelers. The fitness tests will be done at government-certified fitness centers. Also, scrappage can be done anywhere in the country, regardless of the place of registration.
Incentives
The scheme also proposes several incentives that owners can avail of after producing a scrapping certificate including the scrap value for the old vehicle, which is expected to be around 5-6% of the price of a new vehicle. Additionally, a road tax rebate of up to 25% for new personal vehicles, and 15% for new commercial vehicles, as well as a 5% discount against the scrapping certificate, have been proposed.
The policy will bring investments worth more than INR 10,000 crore, Union Minister Nitin Gadkari had said while announcing the details of the policy in Mar’21. Additionally, experts are of the view that the scheme would greatly boost India’s domestic scrap generation.
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