The Ministry of Road Transport and Highways has submitted a draft policy that will allow buyers who scrap their old vehicles will not have to pay registration charges for the new vehicle they purchase by presenting a scrapping certificate. The said certificate can only be issued by an agency recognised by the government for it to be validated.
Mahindra in association with Metal Scrap Trade Corporation Ltd (MSTC) has already set up scrapping centres. Mahindra Accelo, a fully owned subsidiary of Mahindra & Mahindra, has formed a joint venture with MSTC for this project under a new brand called CERO (Mahindra MSTC Recycling Pvt Ltd). The Mahindra CERO is now the first authorised scrapping centre in India and has been given the power to certify owners of scrapped vehicles.
The automotive industry has been seeking for a scrapping policy which they believe will help boost sales in India.
Following the announcement, Amitabh Kant, CEO of Niti Aayog posted a tweet saying “Scrapping is the next big business opportunity in India. Mahindra Accelo has formed a joint venture with MSTC for this business under a new brand, CERO (Mahindra MSTC Recycling Pvt Ltd). Scrap your old vehicle, don’t pay a registration fee for the new one”
The scraping policy, if passed will allow for new business opportunities and also create employment at the scrapping centres as new vehicle scrapping centres will be required and will be certified. However, scrapping of old vehicles also has an environmental impact if done incorrectly which is why government recognised centres have to be regulated. Some have argued that new vehicles require new and more resources and energy to manufacture, thus keeping an old vehicle running longer is more economical. But this does not take into account for newer technology which allows curbing air pollution.
The reason for the scrapping policy to be introduced, which has been in the works for several years now, has been in order to curb vehicular pollution. Especially older commercial vehicles that don’t meet modern emission standards.
The notification issued by the ministry states that registration charges for new vehicles and new renewal will be hiked. However, a newly purchased vehicle would be exempted from the registration charge if the owner presents a scrapping certificate issued by a recognised scrapping agency (like Mahindra CERO) stating that the individual has scrapped a previously owned vehicle of the same category. The certificate will only be applied once. For more details on the policy, read - How to avoid the 400 per cent increase in proposed registration charges by the government
While renewal and fitness certificates for petrol vehicles over 15 years and diesel vehicles over 10 years is not possible in the National Capital Region, it is allowed in other parts of the country. The government is deciding to revise the policy to certifying vehicles fit for the road with a validity of six months against the current norms which require a vehicle to be certified once a year. Additionally, fitness certificates for busses will only be issued to buses only if they user-friendly to the differently-abled – buses with priority seats, signs, securing of crutches, walkers and handrails and wheelchair ramps.