Vehicle Scrap Policy in India 2022

What is Vehicle Scrappage Policy?

The vehicle scrappage policy is a newly launched government initiative taken towards scrapping unfit vehicles that do not meet pollution standards. The new scrapping policy for commercial and private vehicles aims to reduce our impact on the environment and create a system that eliminates polluting automobiles. Numerous developed countries already have a vehicle scrappage policy in place that helps keep a tab on vehicular pollution.

The process to scrap old and unfit motor vehicles is voluntary and isn’t compulsory under the new auto scrappage policy. However, such automobiles will have to go through a fitness test after a period of time. In this article, let’s learn more about the vehicle scrappage policy 2021 and the benefits it offers.

Benefits of Vehicle Scrappage Policy

Here are some key advantages provided under the automobile scrappage policy 2021:

• Eco-Friendly Initiative 

With the help of the new car scrappage policy, there will be more non-polluting and fuel-efficient vehicles on the road. This, in turn, will lessen our impact on the environment, reduce pollution and make way for improved air quality. 

• Higher Demand for Automobiles

Due to the scrapping of old vehicles under the new policy, there will be an increased demand for new automobiles in the markets. Owner-drivers shall look for better alternatives such as electric vehicles which are more eco-friendly.

• Increased Job Opportunities

The scrappage policy will not only lead to higher demands in the automobile industry but also result in more job opportunities in the country.

• Incentives for Buyers

Vehicle buyers can avail lucrative incentives while purchasing new four-wheelers or two-wheelers on providing scrapping certificates. These perks include concession on road tax and GST, waiver of registration fees, discounts by automobile manufacturers, etc.

• Demand in Metal Recycling Business

Due to the phasing out of old vehicles and scrapping them, the new policy is thought to offer opportunities in the metal recycling business as well.

Highlights of Vehicle Scrappage Policy 2021

Finance Minister Nirmala Sitharaman announced the new automobile scrappage policy in her Union Budget speech in February 2021. The newly launched vehicle scrappage policy has numerous objectives such as boosting sales in the automobile sector and reducing the pollution levels in the country. So, let’s look at some highlights of the automobile scrappage policy 2021:

• The initiative aims to eliminate unfit and old vehicles by scrapping them

• Phasing out such unfit commercial and private vehicles will help lessen pollution

• New motor vehicle buyers will boost the automobile industry and opt for environmentally safe alternatives such as electric vehicles

• Owner-drivers opting to scrap their vehicles shall receive additional perks

• The new car scrapping policy shall increase employment opportunities

Vehicle Categorisation for Scrapping Policy

As there are various types of vehicles being driven in India, the automobiles have been classified in different categories under the new car scrappage policy:

• Commercial Vehicles

Commercial vehicles are the ones used commercially for transport purposes. Such motor vehicles will undergo a fitness test after completing 20 years. In case the automobile doesn’t pass the test, it will be scrapped according to the new vehicle scrapping policy 2021.

• Private Vehicles

Private cars or bikes are vehicles that are owned by citizens. Similar to commercial vehicles, private cars and two-wheelers will be scrapped after 15 years if they are declared unfit for the test.

• Government Vehicles

As per the new automobile scrappage policy 2021, vehicles that are more than 15 years old owned by the state and central government will be scrapped.

• Vintage Vehicles

Vintage vehicles are usually older than most four-wheelers and two-wheelers. But as they are driven less often, such automobiles will be determined separately with directives for scrapping.

Fitness Test Under Vehicle Scrappage Policy

Automobiles will undergo fitness tests through the authorised and automated testing centres. As mentioned above, private vehicles will have to go through the fitness test after completing 15 years while the period is 20 years for commercial vehicles. 

If found to be unfit, the registration certificate of these cars or bikes will not be renewed and they will be deemed as unfit. Thus, driving such a vehicle on Indian roads can lead to a penalty as it will be considered unregistered. A green tax will also be charged separately over and above the road tax for renewing the registration of such vehicles. 

Disincentives for Keeping Older Vehicles

• Unfit vehicles will automatically be deemed as unregistered

• Additional green tax will be levied

• Hike in fees for fitness certificate renewal

• Increased fees for registration certificate renewal 

Bottom Line

With the new scrappage policy, we can certainly aim at reducing the increasing pollution and promoting safer vehicles on the road. Just the way it shall be dangerous to drive unfit automobiles that are considered unregistered under the policy, similarly, uninsured vehicles aren’t encouraged either. Not only can an uninsured car or bike land you in legal troubles but also into financial crisis in case of mishaps.

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