National Automobile Scrappage Policy

On August 13, 2021, Prime Minister Narendra Modi launched the ambitious National Automobile Scrappage Policy which aims to ensure elimination of vehicles which are unfit and polluting from the roads across the country. This initiative was earlier announced by Finance Minister- Nirmala Sitharaman in the budget 2021-22. This policy introduces fitness tests for all the private as well as commercial vehicles. It includes voluntary scrappage of private vehicles older than 20 years and commercial vehicles older than 15 years based on a fitness test. This is a voluntary policy for the Indian vehicle owners. Various incentives like tax benefits, waiving off the registration fees, etc., will also be provided for scrapping the vehicles. It will not only bring in new investments but also create new job opportunities.

Overview:

Objectives & Benefits:

• The main objective of the scheme is to remove the unfit vehicles from the roads in the country.
• It tends to ensure fit vehicles on road thereby reducing the pollution levels.
• This tends to encourage fuel efficiency.
• It will target to reduce vehicle pollution in the country.
• It will give a boost to the automobile sector in the country.
• This initiative also aims to create about 50,000 new job opportunities in the road transport sector.
• It will encourage new investments.
• Incentives will be given to those who have scrapped their vehicle.
• This initiative will increase the natural demand of new vehicles in the country

Key Points:

•  Prime Minister Narendra Modi virtually launched National Automobile Scrappage Policy on August 13, 2021 for old vehicle scrap.
• Announcement regarding this scheme was earlier made by Finance Minister, Nirmala Sitharaman in the budget 2021-22.
• Under this scheme the vehicle owners could scrap their old vehicles for the new ones based on a fitness test.
• Fitness test is mandatory for private as well as commercial vehicles which age 20 and 15 years.
• In case a vehicle does not undergo fitness test then the concerned authority will cancel the registration of that vehicle.
• The fitness test will be done in government certified centers only and the fitness report of the vehicle will be provided online.
• Once the vehicle is termed as unfit then the owner will have to scrap it after which a scrapping certificate will also be provided to the owner.
• Various incentives will be provided to such vehicle owners who scrapped their old vehicles.
• Through the scrapping certificate the owner will also get 5-6% on purchasing new vehicle.
• Road tax rebate up to 25% for purchasing new personal vehicle and 15% for purchasing new commercial vehicle will be applied.
• The central government has made it compulsory that all the government vehicles older than 15 years will be scrapped.
• This initiative will contribute to heathy and safer environment.
• It tends to reduce the pollution from the old, used and depreciated vehicles and tend to encourage a pollution free environment.