India: Nitin Gadkari announces vehicle scrappage policy in Lok Sabha

The Union Minister, Nitin Gadkari, has announced the vehicle scrappage policy in the Lok Sabha. The Minister said scrapping older vehicles and recycling them will be a win-win policy for everyone. The scheme will provide incentives to owners of old vehicles to scrap unfit vehicles via registered scrapping centers. Some of the incentives outlined by the Road Transport Ministry include:

  • Scrap value given by scrapping centre is approximately 4-6 percent of the ex-showroom price of new vehicles. 
  • The state governments may be advised to offer a road-tax rebate of upto 25 percent for personal vehicles. 
  • Manufacturers will be advised to provide a discount of 5 percent on buying new vehicles against a scrapping certificate. 
  • In addition, the Ministry is also considering waiving registration fees of new vehicles against the scrapping certificate.

The Ministry of Road Transport and Highways will promote fixing Registered Vehicle Scrapping Facility (RVSF) across India and can encourage private participation for opening such centres. Similarly the Ministry will promote setting up of Automated Fitness Centres on a PPP model by the state government, private sector automobile companies, and the like. 

Appointment for fitness centres may be booked online and tests reports shall also be generated in an electric mode. The tentative timeline for application of the proposed Scrappage Policy is – 

  • Rules for Fitness Tests and Scrapping Centres: October 1, 2021
  • Scrapping Government and PSU vehicles above 15 years: April 1, 2022
  • Mandatory fitness testing for heavy commercial vehicles: April 1, 2023
  • Mandatory fitness testing (phased manner for other categories): June 1, 2024

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