New Vehicle Scrappage Policy 2021: Know full details about the Vehicle Scrappage Policy India 2021

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Let’s find out all about the new vehicle scrappage policy 2021, how will the vehicle scrappage policy India 2021 work, which vehicles will be scrapped, how to get discount after old vehicle scrappage, purpose of new vehicle scrappage policy India 2021, benefits of vehicle scrappage policy 2021 India, and more.new vehicle scrappage policy india 2021

Purpose of new vehicle scrappage policy India 2021 – Why vehicle scrap policy is made

The aim behind the policy is to bring into reality India’s climate commitments, reduce air pollution, improvement in road and vehicular safety, better fuel efficiency and give a boost to the Automobiles Industry.

Also known as the Voluntary Vehicle Fleet Modernization Program, it is a significant milestone in India’s development journey that opens up a new range of possibilities. The intention is to create a viable circular economy by being environmentally responsible. The policy has the features that can help set up new business models where new players along with the traditional automotive ecosystem, can provide new products and services to the consumers and deliver solutions in an organized manner.

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From which date vehicle scrappage policy 2021 India will be implemented?

New vehicle scrappage policy 2021 India will be tentatively implemented from October 1, 2021.

How will the vehicle scrappage policy India 2021 work? Which vehicles will be scrapped? 

Provisions of the policy are as follows:

  • Old vehicles will have to pass a test before re-registration at Automated Fitness Centre. If the test is cleared, the owner can continue to use it. Fitness Certificates will not be issued to vehicles that fail the test.
  • One re-test will be allowed after the necessary rectification and re-inspection will be required if ordered by Appellate Authority, failing which the vehicle will be identified as end-of-life vehicle and will be eligible for scrapping.
  • To prevent longer use of old vehicles, disincentives come in the form of increased fees of fitness tests and issuance of fitness certificates, along with a hike in the re-registration fees. States can also levy “green tax” for the negative externalities generated.
  • Government commercial vehicles, which are over 15 years old and private vehicles which are over 20 years old will be scrapped.

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How to get discount after old vehicle scrappage? Benefits of old vehicle scrapping to customers

  • The state government may be advised to offer road tax rebates of up to 15% for commercial vehicles and 25% for personal vehicles to provide incentives to owners of old vehicles to scrap their unfit vehicles.
  • Vehicle manufacturers to give a discount of 5% to the people producing “Scrapping Certificates” and also the registration fees will be waived off on the purchase of a new vehicle.
  • Scrap value equivalent of 4-6% of the ex-showroom price of new vehicles will be provided to those scrapping their old vehicles and buying new ones.

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Benefits of old vehicle scrapping to industry/economy

  • The policy is likely to increase the turnover of the Automobiles Industry to Rs. 10 lakh crore and create as many as 35,000 additional jobs in times of economic slowdown.
  • It will boost the sales of commercial vehicles and bring huge profits to the GST collection.

The important step is to build more fitness centres and scrapping centres to speed up the process, only then it would be a win-win policy that would help achieve the goal of clean and congestion-free India.

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