Amaan AhmedAug 13, 2021 3:17:34 PM IST
In preparation since 2015, India’s National Automobile Scrapping Policy was officially announced today, August 13, 2021. At the Investor Summit in Gandhinagar, Gujarat, the National Vehicle Scrapping Policy was announced by Indian Prime Minister Narendra Modi, in the presence of Nitin Gadkari, Minister of Road Transport and Highways, and Chief Minister of Gujarat Vijay Rupani. During the presentation, Gadkari mentioned that the vehicle scrapping policy is a step necessitated by India’s commitment to the Paris Agreement; a project that also aims to give a much needed boost to the country’s automotive and manufacturing sectors.
Why is a vehicle scrapping policy necessary?
Promoting clean mobility requires reducing the country’s fuel import bills, and reducing emissions is an urgent need at this time. Gadkari mentioned how more than one crore of vehicles on Indian roads contributes greatly to increasing pollution levels, as well as their tendency to be less fuel efficient towards the end of their life. In addition, he stressed that these vehicles are also inherently dangerous and can pose a threat to their occupants as well as to other road users.
Vehicle scrapping will help phase out unsuitable and polluting vehicles in an environmentally friendly manner. Our goal is to create a #circulareconomics & bring value to all stakeholders while being eco-responsible.
– Narendra Modi (@narendramodi) August 13, 2021
What does the vehicle scrapping policy offer?
As part of its Voluntary Vehicle Fleet Modernization (VVMP) program, the government plans to set up between 450 and 500 automated vehicle proficiency testing stations across India on a partnership basis. public-private (PPP) involving private companies and state governments. A total of 60 to 70 vehicle demolition centers will also be built, with Gadkari mentioning that they will not be located more than 150 to 200 kilometers from any location in India. A total of seven agencies, including Tata Motors, today signed a memorandum of understanding with the government for this project. Tata Motors’ vehicle scrapping center will be located in Gujarat, scrapping passenger and commercial vehicles and have the capacity to recycle up to 36,000 vehicles per year.
The scrapping policy leaves the choice of scrapping up to the vehicle owner, with Gadkari saying automated testing will focus on the vehicle’s fitness, not its age. Private vehicles – which are over 20 years old – will have to undergo aptitude tests, at an estimated cost of Rs 300-400 per test. Vehicles that pass the automated tests will be subject to a “green tax”, which will see owners pay an additional 10-25% road tax when renewing the vehicle’s fitness certificate, as well as a re-registration fee. . However, those who choose to drive a vehicle that has failed the automated test will face substantial penalties, and those vehicles could also be impounded.
When will the vehicle scrapping policy come into effect?
The implementation of the vehicle scrapping policy in India is still a long way off. Initially, heavy commercial vehicles will have to undergo aptitude tests from April 1, 2023, while aptitude tests will be made compulsory for all other types of vehicles from June 1, 2024, gradually.
What are the advantages for a vehicle owner of scrapping their vehicle?
Once the vehicle is scrapped, the owner will receive between four and six percent of the ex-showroom price of their old vehicle, and a scrapping certificate, which will make the individual eligible for a road tax refund. 25 percent, a registration fee waiver and a five percent discount from the showroom price of a new vehicle, offered by the automaker. This will essentially make a new vehicle cheaper for someone who has scrapped their old vehicle, with potential discounts in the range of Rs 30,000 (for a car costing Rs 6 lakh) to Rs 50,000 (for a car). costing Rs 10 lakh).
Over time, the government believes that scrapping an old vehicle and replacing it with a new one will bring substantial monetary benefits to motorists, in addition to reducing emissions and improving fuel efficiency. Road Transport and Highways Secretary Giridhar Aramane said early estimates suggest that an owner of an older compact sedan can enjoy benefits of up to Rs 1.15 lakh over a three-year period in scrapping his vehicle and buying a new one, including direct concessions as well as savings. thanks to lower fuel and maintenance costs.
What are the other positive points of the vehicle scrapping policy?
The national auto scrapping policy will attract investments of over Rs 10,000 crore and generate 50,000 jobs in the country. Gadkari explained that the proper recycling of raw materials obtained from the scrapping will help reduce the import of materials such as aluminum, copper, steel and more. With the ability to recycle up to 99% of the materials used in a vehicle, raw material costs are expected to drop by up to 40%. This will make the components cheaper for automakers and will also increase GST revenue from 30,000 crore to 40,000 crore for state and central governments.
In addition, it is also possible to derive the materials needed for the local production of lithium-ion batteries (for use in electric vehicles) from the scrapping of older vehicles, which could help stimulate the growth of the VE activity.