PM Modi launches vehicle scrappage policy; what is the policy and how it is benefited explained

Prime Minister Narendra Modi launched the Vehicle Scrappage Policy in India on Friday, 13 August, at the Gujarat Investor Summit and requested youths and start-ups to join the program.

Describing it as a “waste-to-wealth mission”, Modi remarked that the policy is an important part of the circular economy.

He added, “vehicle scrappage policy will reduce pollution in our cities and also reflect the government’s commitment towards rapid development. The policy will bring investments worth more than Rs 10,000 crore. In the process, it creates employment opportunities for thousands of youngsters.”

“In two days, we will celebrate our 75th Independence Day, but the next 25 years will also be very important as, during this period, our day-to-day lives will undergo significant changes due to technology,” PM Modi further said, adding that the government’s effort is to ensure that development is “sustainable and environment-friendly.”

Vehicle scrappage policy

Most of the western countries in the world follow vehicle scrappage policy. The policy comes into effect when a vehicle’s registration is complete.  Personal vehicles older than 20 years and commercial vehicles older than 15 years will have to undergo a fitness test at government-registered ‘automated fitness centers’.

The Vehicle Scrapping Policy is aimed at creating an eco-system for phasing out unfit and polluting vehicles in an environmentally friendly and safe manner.

The policy intends to create scrapping infrastructure in the form of Automated Testing Stations and Registered Vehicle Scrapping Facilities across the country.

Vehicles that fail to pass the test will be declared as ‘end-of-life vehicles, which would mean that the vehicle would have to be recycled. This will pave the way for older vehicles to be scrapped. In case the vehicles pass the test, the owners will have to pay a hefty fee for re-registration.

According to the new policy, the re-registration fee would be hiked to around eight times for personal vehicles. The hike will be around 20 times for commercial vehicles.

In western countries, these old vehicles are sent to scrapyards where they are dismantled. The steel used for making the body is crushed and recycled again. In India though, there was no such policy. Most of the vehicles either are on run currently polluting the environment or are lying on roadsides. Getting off older vehicles will generate space for new vehicles. It will boost sales in the otherwise battered and bruised Indian auto industry. 

Read also: Pollution Certificate to become uniform for all vehicles

How it is benefited

In case you decide to scrap your old vehicle at the registered scrapping centers, you will get approximately 4-6 percent of the value of the vehicle’s ex-showroom price.

The ex-showroom price is the cost of the vehicle, excluding the charges paid for registering the vehicle at RTO and insurance.

Moreover, if you buy a new vehicle you will be given a flat 5 percent discount on presenting a scrapping certificate. Registration fees will also be waived on the purchase of a new vehicle.

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