The details of the much-awaited Vehicle Scrappage Policy were announced yesterday at Lok Sabha by Nitin Gadkari, Union Minister of Road Transport & Highways. It was proposed that commercial vehicles older than 15 years without a fitness certificate will automatically lead to the cancellation of registration. Likewise, the timeline for private vehicles is extended to 20 years while the vintage and classic cars will be left out from the purview of the new scrappage policy.

It was further highlighted that four-wheeler government vehicles having completed over 15 years will mandatorily have to be scrapped. Commercial and passenger vehicles failing to pass the fitness test will be labelled as end-of-life. Vehicles passing the fitness test will have to face increased fees for fitness certificates.

For owners who voluntarily opt for the scrappage of their vehicles over re-registration, will receive several incentives and benefits. A rebate of four to six per cent will be granted on the ex-showroom price of the new vehicle. Further, state governments are suggested to offer 25 per cent and 15 per cent concession on road-tax for passenger vehicles and commercial vehicles, respectively. MoRTH has also proposed an additional discount of five per cent or waiving of registration fees by OEMs to customers with a valid ‘Certificate of Vehicle Scrapping’ on buying a new vehicle.

To facilitate smooth scrapping of old vehicles by the owners, the government will set up Registered Vehicle Scrapping Facilities (RVSFs) and fitness centres across the country where appointment and test reports will be provided in a digital form. Gadkari also added that the new scrapping policy will attract new investment of Rs 10,000 crore and generate 35,000 jobs.

As per the government, presently, an estimated 51 lakh light motor vehicles are above 20 years of age while an approximate 34 lakh motor vehicles are above 15 years.