What is vehicle scrappage policy?
The “Voluntary Vehicle-Fleet Modernization Programme” is launched as India’s vehicle scrapping policy. This policy seeks to usher in a new age of what it actually means to own and use an automobile in India. It was announced publicly for the first time at parliament in March by Road Transport & Highways Minister Nitin Gadkari.
13th of August on this month , at Gujarat, during the launch of the policy, our Prime Minister Narendra Modi had quoted that this policy would help us in phasing out the vehicles that are polluting and the ones that are unfit in an eco-friendly manner. Our prime minister says , “We should aim in creating an economy that is viable circular and also it brings value to all the stakeholders and at the sametime, being environmentally responsible.
Vehicle scrappage policy tells us that all the automobiles available are to be used only upto certain year of span and later must be ridden off so that we have better control over the pollution and safety. Vehicles that are commercial over 15 years and vehicles that are for personal over 20 years are pronounced for scrapping. We do not bother whether the vehicles run on diesel or petrol , if they fail to pass the automated fitness test. They are deregistered and the owner can choose to scrap them, but will not be able to use them on the road.
Considering this to be a great turning point in the country’s development, after a given period of time, the car owners generally hand over the cars for scrapping and then plan to get a new one. On the whole, this process of scrapping does not give any benefit to the owners. But after the initiation of this policy, all these car owners who bring their car to scrapping, hold some share of money in the incentives. Cars will be eligible under this policy, once the registration period of the car gets completed and should be older than 31st of December 2012.
Why should I scrap?
In order to help the vehicle owners find a reason to retire old vehicles, the government foresees that the scrappage certificate will allow the owner with something extra, such as tax rebate, sops and a discount on the new car that they are purchasing. The certificate is tradable, which means that they can be used by anyone and not necessarily that the owner of the scrapped vehicle must use it.
This doesn’t mean that vehicle owners need not necessarily rush to scrap their old vehicles. India’s still not ready with the desired infrastructure to either test or scrap vehicles in such huge numbers. The scope and profitability of the scrappage industry in India is sensitized by the Investors in a summit. Gadkari has told the parliament in March that the resultant ecosystem can attract an investment of worth Rs 10,000 crore and create 35,000 new job opportunities for the people.
When is the implementation happening?
The government has come up with how the scrapping yards should be and they have issued some the rules and specifications on what kind of Automated Fitness Centres should come up with and who can set them up.
It is time for India to come up with an ecosystem wherein testing and subsequent scrapping can happen organically without the consumer facing any loss. The mandatory testing for the heavy commercial vehicles will begin from April 2023, and that will be followed by other categories of vehicles. From June 2024, the personal vehicles scrapping will begin. There are also other talks within the government to change the rollout plan by a few months.
Environment friendly
There is 15 years of authority for passenger vehicles to run on road and as such there are 12 years of authority for commercial vehicles. Vehicles which are above this age are considered to be more polluting than the new ones. In fact, the old vehicles consume more fuel than the new vehicles. Due to lack of advanced technologies, they are likely to cause more accidents and failure. There are chances of the car to become ineligible before completion of its lifetime. Usually, many of the car owners wouldn’t dump their car to buy a new vehicle because there was no benefit to them. But with this policy, it helps the owners to get incentives for dumping their car. This is one of the foremost policies as the pollution produced by the older cars is 10 times higher than other fit cars.
Benefits of Scrapping policy
More than 50 Lakh vehicles are more than 20 years old and more than 17 lakh vehicles are older than 17 years according to the road transport report. As this is not a good rate to the environment, the government has introduced this new policy to reduce it. When we choose to scrap the old vehicle, the policy provides us with nearly 4-6 percent of the old vehicle . The policy also ensures that the percentage we obtain is not from the current price of the vehicle but it is from the price which we paid to get that vehicle. Adding to it, the vehicle manufacturers are told to provide a discount of about 5 percent to those who buy a new vehicle after scrapping their previous vehicle. The companies are issuing a free registration fee for buying a new vehicle by submitting their scrappage certificate.
Does it help the economy?
Especially in Europe and the US, this scrappage policy has been followed by demand in the auto manufacturing sector. This is considered as one of the major tools to deal with economic decline in the manufacturing sector and consumption due to the recession. There are also spelt out benefits in the environment since the new cars come out with better and advanced emission standards and better fuel efficiency.
