The government is working on a policy that will link scrapping of vehicles based on their emission levels, rather than solely on their age, the Ministry of Road Transport & Highways Secretary Anurag Jain said today while speaking at the SIAM annual convention in Delhi.
Currently, under the Voluntary Vehicle-Fleet Modernisation Programme, or Vehicle Scrapping Policy, cars older than 20 years and commercial vehicles older than 15 years must be scrapped.
“When we come out with a policy that scrapping is mandatory after 15 years, people come back to us with a question. If I have maintained my vehicle well, why do you want to scrap my vehicle?" Jain said. “We are working on a policy…we are studying it from the pollution view.”
The secretary also emphasized the need for reliable pollution testing and urged the industry to collaborate on developing a robust framework for pollution checks.
The government has been pitching the vehicle scrappage policy, highlighting its impact on reducing vehicle pollution, improving safety, and boosting new vehicle sales. However, the policy is yet to have a significant impact on the industry.
Recently, Minister of Road, Transport and Highways Nitin Gadkari held a meeting with executives of all the major OEMs on this, following which the companies agreed to provide discounts in the range of 1.5% to 3% on new vehicles against scrapping older ones.
The policy supports vehicle scrapping through incentives and infrastructure in the form of automated testing stations and registered vehicle scrapping facilities (RVSFs). Currently, there are over 60 RVSFs and over 75 automated testing stations across 17 states and union territories in the country.
On depositing the vehicle for scrapping at registered scrapping facilities, the vehicle owner gets a Certificate of Deposit (CD), which is tradable. It can be used for multiple benefits, such as registration fee waivers, road tax concessions, and discounts from automakers on the purchase of new vehicles.
The policy has notified state governments to offer a concession on motor vehicle tax of up to 25% for non-transport vehicles, and up to 15% on transport vehicles.
Around 21 states and union territories have announced concessions in the motor vehicle tax on a vehicle that is bought against a CD while 18 states have announced waiver in pending liabilities on the vehicles offered for scrapping at RVSFs.