The Indian government has announced a new national auto scrapping policy. This responds to a long-standing demand from the auto industry for such a policy and comes after the MoRTH approved the vehicle scrapping policy proposed earlier and the proposed policy first introduced during the budget. Union 2021. This policy should stimulate sales of vehicles, especially more environmentally friendly, leading to a reduction in pollution. This aside from the spread of adoption of electric vehicles and the reduction in fuel import costs for the government.
National Automobile Scrapping Policy: Highlights
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 ?? who are over 20 years old ?? will have to undergo physical fitness 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.
National car scrapping policy: Implementation date
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.
National Vehicle Scrapping Policy: Benefits for Vehicle Owners
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.
National vehicle scrapping policy: other advantages
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.