Understanding India's Vehicle Scrappage Policy: Insights, Regulations, and Benefits

What is Vehicle Scrappage Policy in India?

The Vehicle Scrappage Policy, a government-backed initiative, aims to eliminate old and unsuitable vehicles from Indian roads, replacing them with modern counterparts. This strategic program seeks to phase out polluting vehicles, thereby reducing the nation's carbon footprint.

Starting April 1, 2023, Heavy Commercial Vehicles (HCVs) must undergo fitness testing exclusively at Automated Testing Stations (ATSs). From June 1, 2024, the same requirement applies to other Commercial Vehicles (CVs) and Private Vehicles (PVs).

Vehicles older than 15 years (commercial) and 20 years (private) face scrappage if they fail the fitness test, categorized as End-of-Life Vehicles (ELVs).

What are the key highlights of the Vehicle Scrappage Policy announcement?

The Indian automotive industry has faced challenges since late 2019. The introduction of the scrappage policy is expected to aid the struggling sector by stimulating demand for new vehicles. Additionally, scrapping unfit vehicles will contribute to environmental benefits.

Key highlights of the Vehicle Scrappage Policy announcement include:

• Focus on establishing a system to eliminate unfit vehicles in India.
• Development of rules and regulations governing the scrappage process, to be outlined by the MoRTH.
• Provision of benefits to vehicle owners for scrapping old vehicles.
• Anticipated reduction in air pollution, contingent on location.
• Growing interest in purchasing environmentally-friendly, safe, and technologically advanced vehicles.

What is the objective of the Vehicle Scrappage Policy 2021?

The primary goal of the Vehicle Scrappage Policy 2021 is to identify and remove old, unfit, and polluting vehicles from circulation. Here are the key objectives of the scheme:

• Mitigate pollution by scrapping vehicles lacking valid fitness and registration.
• Enhance passenger, road, and vehicular safety.
• Foster job creation within the automobile industry.
• Formalize the existing informal vehicle scrappage sector.
• Enhance fuel efficiency and diminish maintenance expenses for vehicle owners.
• Augment the availability of low-cost raw materials for the automotive, steel, and electronics industries.

Benefits of the Vehicle Scrappage Policy

Here are the potential advantages of the updated vehicle scrappage policy, benefiting the economy, automobile sector, vehicle owners, and other stakeholders:

• Environmental Impact: Scrapping unfit vehicles reduces air pollution and improves overall air quality, promoting a healthier environment.
• Stimulated Demand: As old vehicles are phased out, the demand for new vehicles increases, particularly with over 51 lakh aging light motor vehicles needing replacement.
• Economic Growth: The automotive sector experiences growth with the implementation of the scrappage policy, generating more job opportunities, especially in new vehicle scrapping centers.
• Enhanced Safety: Newer vehicles come equipped with advanced safety features, ensuring heightened safety standards for drivers and passengers.
• Active Recycling Industry: The policy prompts a surge in recycling activities, leading to increased revenue and sustainability within the recycling sector.
• Tax Incentives: Vehicle owners may receive tax benefits as an incentive for scrapping old vehicles, encouraging participation in the program.
• Competitive Pricing: Owners may fetch competitive prices for scrapped vehicles, especially for salvageable parts like tires, fostering a lucrative market for recycled components.

What are the Vehicle Categories under the Scrappage Policy?

On Indian roads, a diverse range of vehicles can be found, each serving different purposes. Due to this diversity, it's essential to categorize vehicles when implementing the vehicle scrappage policy of 2021.

Commercial Vehicles:

Commercial vehicles, including buses and other transport vehicles used for business purposes, fall under this category. According to the vehicle scrappage policy 2021, once these vehicles complete 15 years, they are required to undergo a fitness test. If deemed unfit, they will be scrapped in accordance with the policy's rules.

Government Vehicles:

The vehicle scrappage policy was approved for government vehicles in January 2021. This includes vehicles owned by both central and state governments, which are more than 15 years old. The scrappage of such vehicles will come into effect from April 01, 2022.

Private Vehicles:

Private vehicles, used for daily commuting, fall under this category. According to the policy, private vehicles will be deregistered after 20 years if found unfit or if the vehicle owner fails to renew the registration certificate (RC). Additionally, as a disincentive measure, increased re-registration fees will be charged for vehicles 15 years onwards from their initial registration date.

Vintage Vehicles:

Vintage vehicles are older compared to average vehicles but are driven less and maintained well. They constitute a separate category, and their unique nature will be considered when determining the directives for scrapping them.

What Does the Fitness Test Entail in the Vehicle Scrappage Policy?

The fitness test serves as a critical assessment to determine if a vehicle is capable of continuing operation beyond its technical lifespan. This test involves a comprehensive examination to evaluate the vehicle's roadworthiness and assess its contribution to environmental pollution.

Conducted at automated fitness test centers as per the vehicle scrappage policy, the fitness test encompasses various safety examinations, including engine performance, braking efficiency, and other vital tests.

Similar to the Pollution Under Control test for emissions, vehicles are now required to undergo periodic automated fitness tests. The validity of this test is five years, after which the vehicle must undergo another examination.

Additionally, a green cess, typically ranging from 10-25 percent of the road tax and varying by location, may be levied. This adds to the financial burden on owners of older vehicles, who must also bear the cost of renewing registration.

Failing the fitness test poses challenges for registration renewal, as vehicles that do not pass are considered unregistered under the scrap policy. Driving an unregistered vehicle on Indian roads is a legal offense.

In such cases, vehicle owners are left with two options: scrap the vehicle or undertake necessary repairs to ensure it passes the fitness test. Following the prescribed procedures and fulfilling registration renewal payments are essential steps in this process.