The Ministry of Road Transport and Highways (MoRTH) has today issued a draft notification to disallow re-registration of old government vehicles.

As per the proposal, all vehicles belonging to the Central and State governments, Union Territories, local government institutions, PSUs, STUs, and other autonomous bodies with the Central and State governments, have been put under the ambit of this new proposed amendment to the Central Motor Vehicle Rules (1989).

The Ministry has invited suggestions or objections to its proposal for the next 30 days, and if it is able to sail smoothly, the rule is proposed to to become effective from April 1, 2022.

The step could be understood to be in line with the government's recently announced Scrappage Policy, which aims to take old and higher polluting vehicles off the road for environmental protection.

There are more than 10 million old and polluting vehicles in India and this move is expected to get rid of old police vans, postal vans, state transport buses and ambulances to name a few. While reducing pollution, the need to replace older vehicles will also drive demand for the domestic automobile industry in terms of supplying new vehicles.

According to the Centre for Science and Environment (CSE), by 2025, India will have a monumental load of over 2 crore old vehicles (see table below) nearing the end of their lives. These, along with other unfit vehicles, will cause huge pollution and environmental damage.

In a recent interview with Autocar Professional, Nishant Arya, executive director, JBM Group, had commented on the Scrappage Policy and said, "The Scrappage Policy, specifically on the commercial vehicle side, would give a boost to the sector and therefore, people are viewing it positively. These are primarily BS-II and BS-III vehicles which would be moving out of the roads and thus reducing vehicular pollution as well."

"There will be a thrust towards the M&HCV and HCV segments. I expect there to be substantial purchasing in the coming financial year, thereby giving a much-needed fillip to the sector. It would also give a boost to the logistics sector as the cost of logistics will go down with a new fleet. The cost of older vehicles is higher and we were seeing companies trying to increase their Opex to save their Capex. So, we will see logistics costs becoming more competitive as we move forward."