Nitin Gadkari announces Vehicle Scrappage Policy: Benefits, discounts, incentives explained

Nitin Gadkari has announced some new details on the Vehicle Scrappage Policy that aims to remove vehicles older than 15-20 years of age from the roads. Here is what all benefits you will get for scrapping your vehicle, where you can get it done along with the proposed timelines.

By:Updated: Mar 18, 2021 6:33 PM
Voluntary Vehicle Scrappage Policy

 

Nitin Gadkari has announced the vehicle scrappage policy today. The Union Minister said that the scrappage policy will not only help in the reduction of air pollution by 25 to 30 percent but will also help in improving road safety. The scrappage policy would eventually result in the recycling of numerous metals and hence, the cost of raw materials for the automotive and electronics industry is tend to decrease. Moreover, Gadkari said that the scrappage policy will result in the creation of 35,000 direct jobs and has announced an additional investment of Rs 10,000 crore. The vehicle scrappage policy was earlier proposed by Union Finance Minister Nirmala Sitharaman during Budget speech 2021 and the same targets at removing vehicles older than 15-20 years from the roads.

In order to be precise, private vehicles older than 20 years and commercial vehicles older than 15 years that fail to pass the fitness test will be de-registered. Such vehicles that fail the fitness test or vehicles whose owners fail to renew the registration certificate would be declared “end-of-life vehicles”. The said vehicles shall be scrapped at the authorized scrapping centres.

What benefits you will get for scrapping your vehicle?

Coming to the incentives, if you scrap your old vehicle through one of the registered scrapping centers, you will get approx. 4-6% of the ex-showroom price of the new vehicle as an incentive. In addition, the state governments have been advised to offer a rebate of 25% in road tax for private vehicles and 15% for commercial vehicles. In addition to this, the vehicle manufacturers will also be advised to offer a 5 percent discount on the purchase of a new vehicle after an individual presents a scrapping certificate. The registration fee on the purchase of a new vehicle shall also be waived off.

Automated Fitness Testing Centers

Vehicles will need to undergo a fitness test at automated fitness centers. As already mentioned, personal vehicles need to go through a fitness test after 20 years while the time limit is 15 years for commercial vehicles. These centers will conduct fitness tests that will include a vehicle’s emission test, braking test, and testing of the safety components as per CMVR 1989. The government aims to have at least 718 centers across India and is targeting one in each district. In addition to this, MoRTH is also promoting the model inspection and Certification Centre worth Rs 17 crore in all states.

Gadkari said that such automated fitness centers will have adequate space for test lanes, booking cash counters, IT servers, parking, and free movement of vehicles. Also, in order to avoid the Conflict of Interest, operators shall only be able to provide a testing facility and shall not be able to provide repair/ sale of spares services. Appointments at these fitness centers can be booked online and automatic report generation will be done electronically.

Tentative dates for scrappage policy rules

Rules for Fitness Tests and Scrapping Centres – 1st October, 2021

Scrapping of Govt and PSU vehicles above 15 years of age – 1st April, 2022

Mandatory Fitness Testing –
– Heavy Commercial Vehicles – 1st April, 2023
– Phased introduction for all other categories – 1st June, 2024

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