Vehicle scrappage policy: Road tax incentives, discounts and much more
During his statement, Nitin Gadkari highlighted that there are 51 lakh vehicles in India which are older than 20 years, 34 lakh vehicles which are more than 15 years old and around 17 lakh vehicles, older than 15 years, but do not have vehicle fitness certificate.
FollowUnion Minister Nitin Gadkari announced the vehicle scrappage policy in the Lok Sabha on Thursday. The policy aims to keep old polluting vehicles off the roads while promoting newer vehicles to boost growth in the auto sector, which has been hit hard due to the Covid-19 pandemic.
"We're introducing Voluntary Vehicle Fleet Modernisation Program, which would scrap old vehicles and support people economically while buying new vehicles. Scrap centres, auto industry, components industry will be benefitted from this policy," Gadkari said while speaking on the policy in Lok Sabha.
During his statement, Nitin Gadkari highlighted that there are 51 lakh vehicles in India which are older than 20 years, 34 lakh vehicles which are more than 15 years old and around 17 lakh vehicles, older than 15 years, but do not have vehicle fitness certificate. According to him, old vehicles pollute air 10-12 times more compared to vehicles that are fit, and also pose a risk for road safety.
Here’s the key takeaways from the Gadkari’s presentation:
·     In case of failure to get a fitness certificate, commercial vehicles will be de-registered after 15 years. Private vehicles will be de-registered after 20 years if found unfit or in case of a failure to renew registration certificates.
·     A vehicle will have to go mandatory fitness test once the registration of the vehicle ends. The age of the vehicles is kept 15 years for commercial vehicles and 20 years for personal vehicles.  If a vehicle fail to pass the fitness test, it will be deemed ‘an-end-of-life’.
·     Under the new vehicle scrappage policy, owners of old vehicles will get strong incentives to scrap old and unfit vehicles. "We have issued an advisory to all vehicle manufacturers to offer 5% discount while selling a new vehicle against a scrapping certificate.
·     Vehicle re-registration fees will be increased to discourage people from running old vehicles. A scrap value of the ex-showroom price of vehicle ranging from 4-6% will be given to the owner if they choose to scrap the vehicle.
·     Automated fitness centres will be established throughout the country to ease scrapping.
·     A rebate of upto 25% will be given in Road Tax. Vehicle manufacturers will be advised to give 5% discount on new vehicles against a scrapping certificate.
·     Increase in RC and fitness certificate renewal fee for personal and commercial vehicles respectively; additional penalty for delay in renewal of certificates.
·     Additional levy of green tax on old vehicles by states.
·     Mandatory fitness testing for heavy commercial vehicles to be in effect from April 1, 2023.
·     Mandatory fitness testing for other categories will come into effect in a phased manner from June 1, 2024.
