The new vehicle scrapping policy will present a win-win situation for all stakeholders, minister for road transport and highways Nitin Gadkari said on Thursday.
 

“The results of the policy will include aspects like safety, reduction in fuel consumption and pollution,” he told media, after announcing the Vehicle Scrapping Policy in the Parliament.

The minister said that the policy doesn’t have any punishment provisions like penalty and is in the interest of the poor. Listing out the benefits of the new policy, he said, “As the raw material from the scrapped vehicles will be used, not only the price of new vehicles will be reduced but their maintenance cost will also come down and it will also help in generating more employment opportunities in the sector.”

He expressed hope that around 100 vehicle scrapping centres will become operational in the country in next one and a half to two years and the number will keep increasing.

He also said that he had requested the finance minister and states to give concession in Goods & Services Tax on purchase of new vehicles. He stated that the vintage cars will be kept out of the scrapping policy. He also said that the road transport ministry has made it mandatory for economic models of the cars to have airbags as an additional safety measure.

Earlier, Gadkari made a Suo Moto statement in the Parliament on the policy. Here is the official statement:

India has 51 lakh Light Motor Vehicles which are older than 20 years and 34 lakh Light Motor Vehicles which are older than 15 years. Around 17 lakh Medium and Heavy Commercial Vehicles are older than 15 years without valid fitness certificate. Older vehicles pollute the environment 10 to 12 times more than fit vehicles and pose a risk to road safety.

In the interest of a clean environment and rider and pedestrian safety, the Ministry of Road Transport and Highways is introducing the Voluntary Vehicle-Fleet Modernization Program or “Vehicle Scrapping Policy” which is aimed at creating an Eco-System for phasing out of Unfit and Polluting Vehicles.

The objectives of the policy are to reduce population of old and defective vehicles, achieve reduction in vehicular air pollutants to fulfil India’s climate commitments, improve road and vehicular safety, achieve better fuel efficiency, formalize the currently informal vehicle scrapping industry and boost availability of low-cost raw materials for automotive, steel and electronics industry.

The ecosystem is expected to attract additional investments of around Rs. 10,000 Crore and 35,000 job opportunities. The ministry shall in the next few weeks publish draft notifications, which shall be in the public domain for a period of 30 days to solicit comments and views of all involved stakeholders.

The criteria for a vehicle to be scrapped are primarily based on the fitness of vehicles through Automated Fitness Centres in case of commercial vehicles and Non-Renewal of Registration in case of private vehicles. The criteria have been adapted from international best practices after a comparative study of standards from various countries like Germany, UK, USA and Japan. A Vehicle failing the fitness test or failing to get a renewal of its registration certificate may be declared as End of Life Vehicle. Criteria to determine vehicle fitness will be primarily emission tests, braking, safety equipment among many other tests which are as per the Central Motor Vehicle Rules, 1989.

It is proposed that commercial vehicles be de-registered after 15 years in case of failure to get the fitness certificate. As a disincentive measure, increased fees for fitness certificate and fitness test may be applicable for commercial vehicles 15 year onwards from the date of initial registration.

It is proposed that Private Vehicles be de-registered after 20 years if found unfit or in case of a failure to renew registration certificate. As a disincentive measure, increased re-registration fees will be applicable for private vehicles 15 year onwards from the date of initial registration.

It is being proposed that all vehicles of the Central Government, State Government, Municipal Corporation, Panchayats, State Transport Undertakings, Public Sector Undertakings and autonomous bodies with the Union and State Governments may be de-registered and scrapped after 15 years from the date of registration.

The scheme shall provide strong incentives to owners of old vehicles to scrap old and unfit vehicles through registered scrapping centres, which shall provide the owners with a scrapping certificate. Some of these incentives include:

(1) Scrap Value for the old vehicle given by the scrapping centre, which is approximately 4-6% of ex-showroom price of a new vehicle.

(2) The state governments may be advised to offer a road- tax rebate of up to 25% for personal vehicles and up to 15% for commercial vehicles

(3) The vehicle manufacturers are also advised for providing a discount of 5% on purchase of new vehicle against the scrapping certificate.

(4) In addition, the registration fees may also be waived for purchase of new vehicle against the scrapping certificate.

The Ministry of Road Transport and Highways will promote setting up of Registered Vehicle Scrapping Facility (RVSF) across India and will encourage public and private participation for opening up of such centres. Efforts are also being made to set up Integrated Scrapping Facilities across India. Some of the identified places include Alang in Gujarat, where it is being planned to develop a highly specialized centre for scrapping among many other potential centres, where different scrapping technologies can be synergized together.

With a simplified registration process through single window, the scrapping facility shall have to comply with environmental and pollution norms and with all applicable acts of law. It shall be ensured that the scrapping centres have adequate parking facility, de-pollution equipments for air, water and sound pollution and adequate facilities for hazardous waste management and disposal.

Similarly, the Ministry shall promote setting up of Automated Fitness Centres on a PPP model by state government, privatesector, automobile companies etc

These centres may have adequate space for test-lane, IT servers, parking and free movement of vehicles. To avoid conflict of interest, operators of fitness centres shall only provide testing facility and shall not provide repair/sale of spare services. Appointment for fitness centres may be booked online and tests reports shall also be generated in an electronic mode.

Tentative timeline for application of Proposed Scrapping Policy is as follows:

1. Rules for Fitness Tests and Scrapping Centres: 01st October 2021

2. Scrapping of Government and PSU vehicles above 15 years of age: 01st April 2022

3. Mandatory Fitness Testing for Heavy Comm. Vehicles: 01st April 2023

4. Mandatory Fitness-Testing (Phased manner for other categories): 01st June 2024