Modi govt's vehicle scrappage policy: All you need to know

Union road transport minister Nitin Gadkari has launched one of the most talked-about policies on phasing out old and defective vehicles. The fleet modernisation programme of the government aims to achieve multiple goals like reduction in air pollution, the fulfilment of India's climate commitments, improving road and vehicle safety, better fuel efficiency, and boosting the availability of low-cost raw materials for auto, steel and electronics industry. Going forward, private vehicles will be de-registered after 20 years if found unfit or in case of failure to renew registration. Enhanced re-registration will be applicable on private vehicles from the 15th year of original registration.

Here's what you need to know about the Modi government's scrappage policy:

According to the statistics, there are around 51 lakh light motor vehicles or LMVs older than 20 years in India. Around 34 vehicles are LMVs older than 15 years, while the number of medium and heavy commercial vehicles less than 15-year-old stands at 17 Lakh.

Also read: Budget 2021: FM Nirmala Sitharaman announces vehicle scrappage policy

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Those opting for the scheme will get scrap value of the old vehicle at the scrappage centre, which is about 4-6 per cent of the ex-showroom price of new vehicles and will get a road tax rebate of up to 25 per cent on personal vehicles and up to 15 per cent on commercial vehicles.  They can also avail of a 5 per cent manufacturer discount against the scrapping certificate and also a waiver in the registration fee.

Also read: Government announces voluntary scrappage scheme for vehicles, Gadkari seeks GST rebate

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There was a crying need to bring in such a scheme on the national level. The scheme aims to cut 25-30 per cent vehicular air pollution and ensure better fuel efficiency. As the old vehicles will vanish from the road, the service and manufacturing industry will get a boost with an increase in demand for new vehicles.

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The government has set some deadlines to ensure the effects of the scheme on the ground could be seen as early as possible. Rules for fitness centres and scrapping centres will come into effect from October 1. While scrapping of government vehicles over 15 years can be done by April 1, 2022, heavy CVs and other category vehicles must be mandatorily tested fitness by April 1, 2023, and June 1, 2024, respectively.

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Also read: Gadkari asks auto component manufacturers to increase localisation to 100%