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Vehicle Scrappage Policy in India

Vehicle Scrappage Policy — (Source: ey.com)

Nirmala Sitharaman, India’s Finance Minister, declared a new vehicle scrappage policy during the Union Budget on 1st February 2021.

Later, on 18th March 2021, Nitin Gadkari, Minister for Road Transport and Highways, announced this scheme fully with all details. The idea behind this plan was to phase out vehicles that were older than 15-20 years. The Government took this step to bring down levels of urban pollution.

So, without further ado, let’s look into all the details of the vehicle scrappage policy in India.

What Is Vehicle Scrappage Policy?

The vehicle scrapping policy says that the Government will phase out commercial vehicles of more than 15 years and passenger vehicles of more than 20 years if they fail the emissions and fitness tests.

The idea behind this policy is to reduce pollution and boost the economy, which is suffering post-pandemic. Some also view it as a way to stimulate the Original Equipment Manufacturers’ demand.

What Are the Highlights of Vehicle Scrappage Policy Announcement?

Here are some significant highlights of the vehicle scrapping policy in India.

There will be a system in place to scrap unfit vehicles.
People should prepare to buy environmentally-friendly, safe, and technologically advanced vehicles in the future.
Scrapping old and unfit vehicles will reduce pollution in specific locations.
There will be certain benefits for vehicle owners who opt to do this.

What Are the Benefits of Vehicle Scrappage Policy?

The new vehicle scrappage policy has many benefits. Take a look at some of them!

The scrapping of unfit vehicles will result in less air pollution and much better air quality.
Vehicle owners may receive tax benefits to scrap old vehicles.
It will lead to the reorganisation and growth of the recycling industry.
The entire automobile sector will benefit as there will be a higher demand for jobs in scrapping centres.
There will be a demand for new vehicles, as the old ones are scrapped.

Eligibility Criteria for Vehicle Scrappage Policy

For a vehicle to become eligible for scrapping, it should be more than 15 years if it is a commercial vehicle and 20 years if it is a passenger vehicle.

What Is the Categorisation of Vehicles for the Scrappage Policy?

Since there are different types of vehicles, vehicle scrapping laws cannot be the same for all classes. Hence, the Government has categorised them into different types.

Commercial Vehicles: After 15 years have passed, commercial vehicles will be subject to a fitness test. If it passes this test, it will be allowed to ply. Otherwise, it cannot run and will be scrapped according to the rules specified for commercial vehicles.
Government Vehicles: The Government will implement this policy from 1st April 2022. All State and Central government vehicles that are above 15 years of age will be scrapped.
Private Vehicles: After 15 years, these vehicles will also undergo tests and will only be eligible to ply on road if they pass this fitness test.
Vintage Vehicles: The vehicle scrappage policy in India will not apply to vintage vehicles as they are well maintained and driven less frequently.

There are many benefits for vehicle owners under the vehicle scrappage policy. They may receive a discount of 5% upon purchasing a new vehicle. All they have to do is show the certificate they received from scrappers. Hence, the overall vehicle scrappage policy is beneficial for owners as well as the environment.

Frequently Asked Questions

✓ What happens if your vehicle fails the fitness test?

If your vehicle fails the fitness test, it is allowed to take up to 2 retests. Failing that means it will not be permitted to obtain a registration certificate. Therefore it cannot ply on the roads.

✓ When does my vehicle compulsorily have to take the fitness test?

The vehicle has to take the fitness test when the registration cycle is complete.

✓ When will the scrapping policy come into effect?

Commercial vehicles will start their mandatory testing from 1st April 2023. For passenger vehicles, 1st June 2024 is the starting date.

Disclaimer: The information mentioned here is collected from different online websites, news websites and government sources. They may change as per time. Please check the official government websites and verify the information before making any decision.

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Go Digit General Insurance Limited (formerly known as Oben General Insurance Ltd.) - Registered Office Address - 1 to 6 floors, Ananta One (AR One), Pride Hotel Lane, Narveer Tanaji Wadi, City Survey No.1579, Shivaji Nagar, Pune-411005, Maharashtra | Corporate Office Address - Atlantis, 95, 4th B Cross Road, Koramangala Industrial Layout, 5th Block, Bengaluru-560095, Karnataka