On 13th August, 2021, the government launched the vehicle scrapping policy (Voluntary Vehicle-Fleet Modernisation Program), which was announced in the Union Budget 2021-22.
Aim
Creating an eco-system for phasing out unfit and polluting vehicles and creating an infrastructure for automated testing of vehicles that have completed the registration period.
Salient Features
Scrapping Infrastructure: It intends to create scrapping infrastructure in the form of Automated Testing Stations and Registered Vehicle Scrapping Facilities.
Incentives will be provided for Scrapping Old Vehicles and Buying New Ones: Vehicle manufacturers can give up to 5% discount for buying new vehicles. Incentives will also be provided in registration fees and road taxes.
Vehicles to be Exempted: Strong hybrids and electric vehicles, vehicles using alternative fuels such as CNG, ethanol and LPG and Farm and agricultural equipment such as tractors, tillers and harvesters will be exempted.
Fitness Testing: Five hundred automated vehicle fitness testing stations across India will be setup on a PPP basis. Private vehicles – which are over 20 years old – will have to undergo fitness tests.
Green Tax: Vehicles that pass the automated tests will be subjected to a ‘green tax’, at a rate of additional 10 percent to 25 percent of road tax at the time of the renewal of the vehicles’ fitness certificate.
Testing of Old Vehicles: Old vehicles will be tested at the Automated Fitness Center and the fitness test of the vehicles will be conducted according to international standards.
Benefits
It will help in modernizing India’s vehicle fleet, boost the Atmanirbhar Initiative, reduce pollution and promote circular economy.