PM launches vehicle scrappage policy offering road tax rebate, free registration for new vehicles

New Delhi, Aug 13 (FN Bureau) Launching the long-awaited vehicle scrappage policy, Prime Minister Narendra Modi on Friday said that the scheme would fetch Rs 10,000-crore fresh investment and create thousands of jobs. Under the Voluntary Vehicle-Fleet Modernization Program or the Vehicle Scrapping Policy, vehicle-owners choosing to scrap their vehicles would get a certificate enabling them to get exemption in road tax, free registration for purchase of new vehicle. The Prime Minister said that the general public will benefit greatly from this policy in every way. “The first advantage will be that a certificate will be given on scrapping the old vehicle. Whoever has this certificate will not have to pay any money for registration on the purchase of a new vehicle,” he said in his virtual address at Investor Summit in Gujarat.

“Along with this, he will also be given some exemption in road tax. The second benefit will be that the maintenance cost, repair cost, fuel efficiency of the old vehicle will also be saved in this. The third benefit is directly related to life. There will be some relief from the high risk of road accidents due to old vehicles and old technology. Fourth, it will reduce the harmful impact of pollution on our health,” the Prime Minister said. He stressed that under the new policy vehicles will not be scrapped merely on the basis of age and they will be scientifically tested through authorized, automated testing centres. Under the voluntary vehicle scrapping policy, personal vehicles would undergo a fitness test after 20 years while commercial vehicles would require it after completion of 15 years. The registration of vehicles which do not have fitness certificates would be automatically cancelled. “Unfit vehicles will be scrapped scientifically. It will ensure that registered vehicle scrapping facilities all over the counties are technology driven and transparent,” Modi said.

The policy is set to support the scrap related sector and entrepreneurs involved. The Prime Minister lamented the fact that India imported Rs 23,000 crore worth of scrap steel during the last year as the country’s scrapping is not productive and unable to recover energy and rare earth metals. He reiterated that India is committed to providing global standard safety and quality to its citizens and this thinking is behind the transition from BS-4 to BS6 fuel efficiency standards. The Prime Minister said the new scrapping policy is an important link in the circular economy and in the waste to wealth campaign. “This policy also reflects our commitment to reduce pollution from the cities of the country and protect the environment and fast development. This policy by following the principle Reuse, Recycle and Recovery will also promote the country’s self-reliance in the auto sector and in the metal sector,” he noted. Speaking in Parliament, Road Transport Minister Nitin Gadkari had said that older vehicles pollute the environment 10 to 12 times more than fit vehicles and pose a risk to road safety. The scrappage scheme provides strong incentives to owners of old vehicles to scrap old and unfit vehicles through registered scrapping centres, which shall provide the owners with a scrapping certificate. Apart from road tax rebate and waiver of registration fees, the scrappage policy advises automakers to provide a discount of 5 per cent on purchase of new vehicle against the scrapping certificate.