Vehicle scrappage policy announced by Nitin Gadkari in Lok Sabha

Vehicle scrappage policy announced by Nitin Gadkari in Lok Sabha

18th Mar 2021 7:56 pm

The Union Minister for Road Transport & Highways outlined incentives and development plans for scrapping.

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The Union Minister for Road Transport & Highways, Nitin Gadkari, has announced the vehicle scrappage policy in the Lok Sabha. The Minister said scrapping older vehicles and recycling them will be a win-win policy for everyone.

Gadkari claimed, “This policy will enable setting up of scrap centres.” According to him, the scrapping centres will benefit car and bike makers as well as component makers.

The scheme will provide incentives to owners of old vehicles to scrap unfit vehicles via registered scrapping centres. Some of the incentives outlined by the Road Transport Ministry include:

  • Scrap value given by scrapping centre is approximately 4-6 percent of the ex-showroom price of new vehicles. 
  • The state governments may be advised to offer a road-tax rebate of upto 25 percent for personal vehicles. 
  • Manufacturers will be advised to provide a discount of 5 percent on buying new vehicles against a scrapping certificate. 
  • In addition, the Ministry is also considering waiving registration fees of new vehicles against the scrapping certificate.

He outlined the development plans and added that scrapping will also reduce the cost of vehicle components, “Within 5 years, India will become an automobile hub, in the coming times, auto parts will cost less and the government is promoting electric vehicles.”

Speaking about the new policy with regards to vintage and classic cars, Autocar India's resident classic car expert, Perseus Bandrawalla, said, "Voluntary scrapping comes as a relief for classic car owners and enthusiasts. It's not just that classic cars are an important part of automotive history, but also that the history of the motor car is an important chapter in the history of the world. This scheme should also encourage owners to keep their cars in good condition."

Viveck Goenka, President, Western India Automobile Association (WIAA), said, "The new scrappage  policy, without being coercive, will discourage the use of polluting and gas guzzling cars. Those who want to preserve Young Classics and those who want to keep old cars for sentimental reasons are free to do so, albeit at a price, either by paying high fitness fees or by  environment friendly conversions of their vehicles. This is an environment-friendly and thoughtful initiative by the government, and will also increase road safety. We should all welcome it." 

The Ministry of Road Transport and Highways will promote setting up Registered Vehicle Scrapping Facility (RVSF) across India and will encourage private participation for opening such centres. Similarly the Ministry will promote setting up of Automated Fitness Centres on a PPP model by the state government, private sector automobile companies and the like. 

Appointment for fitness centres may be booked online and tests reports shall also be generated in an electric mode. The tentative timeline for application of the proposed Scrappage Policy is - 

  • Rules for Fitness Tests and Scrapping Centres: October 1, 2021
  • Scrapping Government and PSU vehicles above 15 years: April 1, 2022
  • Mandatory fitness testing for heavy commercial vehicles: April 1, 2023
  • Mandatory fitness testing (phased manner for other categories): June 1, 2024

Also see:

MoRTH to disallow re-registration of old government vehicles

Front passenger airbag made mandatory for passenger cars in India

Driver’s Licence can now be renewed online

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