New Delhi: Private vehicles over 20 years old will be mandatorily de-registered from 1 June 2024 if they fail fitness test, or their registration certificate is not renewed, Road Transport and Highways Minister Nitin Gadkari announced Thursday as he spelt out the contours of the voluntary vehicle scrapping policy.
The policy caps the life of government and commercial vehicles at 15 years, and private vehicles at 20 years. Finance Minister Nirmala Sitharaman had announced the policy in her budget speech on 1 February.
For heavy commercial vehicles over 15 years old and a failed fitness test, the deadline for deregistration is 1 April 2023.
Private vehicle owners, who renew fitness certificates after 20 years, will have to pay an increased fee of Rs 7,000. They will also pay another Rs 5,000 for renewal of registration fee.
Gadkari said the government will be giving a slew of monetary incentives to owners of old vehicles for getting them scrapped through registered scrapping centres.
Automakers will give a 5 per cent discount to those who buy new vehicles after getting their old vehicle scrapped.
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States told to give discounts on registration fee, road tax
Speaking in the Lok Sabha Thursday, Gadkari said the road transport ministry has issued advisories to automakers to give a 5 per cent discount on purchase of new vehicles to those consumers who scrap their old vehicles and have a scrapping certificate.
“We can’t make it mandatory as it is a voluntary policy,” Gadkari said.
States have also been asked to give discounts in registration fee, and up to 25 per cent and 15 per cent rebate in road tax to buyers of new personal vehicles and commercial vehicles, respectively, the minister said.
“It’s a win-win policy that will incentivise people to get their old vehicles scrapped and buy new ones… Automobile sales will also go up. Centre and states’ GST share will increase,” he said.
Gadkari said currently there are 51 lakh light motor vehicles in the country, which are over 20 years old and 34 lakh light motor vehicles, which are over 15 years old. Besides, there are 17 lakh medium and heavy vehicles, which are over 15 years old, and are plying without fitness certificates.
“Such vehicles not only result in increased vehicular pollution but also endanger road safety. The scrapping policy will address these concerns. It will not only benefit the scrapping industry, automobile industry, component manufacturers but also common man,” he said.
Govt vehicles to go off the road first after 15 years
Government vehicles would become the first category of vehicles that will go off the road after they attain 15 years.
Last week, the Narendra Modi government had issued a draft notification, saying that registration of all government vehicles that are 15 years old by 1 April 2022 will not be renewed. This will apply to all vehicles owned by Centre, state, Union territories, public sector undertakings, municipal bodies and autonomous bodies.
In January, the road transport and highways ministry had proposed a clutch of measures to ensure that vehicles over 15 years old stay off the road. This included a steep rise in fee for renewal of fitness certificate for old commercial vehicles, increasing the fee for renewal of registration of private vehicles that are over 20 years old, and imposing a hefty green tax on old polluting vehicles.
On Thursday, Gadkari said the turnover from the scrapping industry is expected to be to the tune of Rs 7.2 lakh crore. “We are expecting that investment of Rs 10,000 crore will happen for setting up scrapping centres, automobile fitness centres,” he said, adding that the policy is expected to create employment for 3.7 crore people.
But implementing the policy will be challenging, primarily because of lack of supporting infrastructure. India has just seven automated fitness test centres, which is inadequate to cater to the market. The country also has just two authorised scrappage centres.
This report has been updated to add more details about the announcement.
(Edited by Amit Upadhyaya)
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No details about how does one go about scrapping his or her vehicle? Who will take the scrapped vehicle? Scrapped vehicle also has some value for its metal and other contents. Should it be sold to someone authorised to destroy or crush the scrapped vehicles. Who will issue the Scrapping Certificate?