The Union Road and Transport Minister recently announced the Vehicle Scrapping Policy in the Lok Sabha, first revealed in the Union Budget for 2021-22. This policy focuses on the scrappage of Light Motor Vehicles (LMVs) that are older than 15 and 20 years, aiming to reduce vehicular air pollution, enhance road safety, and improve vehicle standards. Alongside this, India plans to implement a Global Positioning System (GPS) based toll collection system, eliminating all toll booths within a year.
Key Provisions of the Vehicle Scrapping Policy
Under the new policy, old vehicles must clear a stringent fitness test prior to their re-registration. Specifically, government commercial vehicles over 15 years old and private vehicles over 20 years old will be subjected to these fitness tests at the Automated Fitness Center. The criteria for these inspections will adhere to international standards, checking emission levels, braking systems, and vital safety components. Vehicles failing this fitness test will be scrapped. Additionally, the Ministry has laid down rules for the registration process for scrapping facilities, their powers, and scrapping procedures.
Incentives and Disincentives under the Policy
To incentivize vehicle owners to discard old and unfit vehicles, the state governments may propose a road-tax rebate of up to 25% for personal vehicles and up to 15% for commercial vehicles. Simultaneously, vehicle manufacturers will offer a 5% discount to those presenting a ‘Scrapping Certificate,’ also waiving off registration fees on the purchase of new vehicles. However, vehicles 15 years or older from the original date of registration will face increased re-registration fees as a disincentive.
Potential Benefits of the Vehicle Scrapping Policy
Implementation of the policy anticipates the creation of more scrap yards across the country, boosting waste recovery from old vehicles. The establishment of new fitness centers is set to provide employment for 35,000 individuals, injecting an estimated Rs 10,000 crores in investments. The policy could also stimulate sales of heavy and medium commercial vehicles, currently contracting due to the economic slowdown triggered by the bankruptcy of IL&FS (Infrastructure Leasing & Financial Services) and the Covid-19 pandemic. The redirection of funds through Goods and Services Tax (GST) from the policy expects an increment of around Rs 30,000 to 40,000 crores in the government treasury.
Reduction of Prices and Pollution
As the recycling of metal and plastic parts from scrapped vehicles promises to lower auto component prices substantially, the manufacturing costs for vehicle producers will also decrease. At an environmental level, the scrapping policy aids in enhancing fuel efficiency and curbing pollution. By scrapping older vehicles, which pollute the environment 10 to 12 times more, the measure actively contributes towards cleaner air.
Other Initiatives to Reduce Vehicular Pollution
Parallel to the Vehicle Scrapping Policy, multiple initiatives are under execution to tackle vehicular pollution. These include the Go Electric Campaign, FAME India Scheme Phase II, Electric Vehicles (EV) Policy 2020 for Delhi, Hydrogen Fuel Cell Based Bus and Car Project, and National Electric Mobility Mission 2020.