VEHICLE SCRAPPAGE POLICY (Syllabus: GS Paper 2/3 – Gov policies/Env./Economy)

Context: The Ministry of Road Transport and Highways has launched the Voluntary Vehicle Modernization Program, also known as the Vehicle Scrapping Policy

Vehicle Scrappage Policy

• About: It is an initiative aimed at reducing pollution by phasing out older, unfit vehicles.
• Launched: 2021
• Target: The policy specifically targets commercial vehicles more than 15 years old and private vehicles over 20 years old, requiring them to undergo mandatory fitness tests.

oVehicles that fail these tests must be scrapped, with owners offered incentives to encourage the purchase of new vehicles.

• Provision:

oConcession on road tax: State governments may offer a concession on the road tax on the new vehicle. The concession can be up to 25% for non-transport vehicles and 15% for transport vehicles.

oDiscount on a new vehicle: Vehicle manufacturers have been requested to offer a discount of 5% on purchasing a new vehicle against the Certificate of Deposit. This discount is over and above the scrap value.

oAvail a discount: After scrapping the vehicle, the owner may receive a 4 to 6% discount on the new vehicle’s cost.

oDisincentive:  Higher re-registration fees will apply to vehicles that are 15 years or older from their initial registration date.

Significance: Scrapping unfit vehicles will result in less air pollution and better air quality.

oWith old vehicles being scrapped, the demand for new vehicles will rise as the old ones will need to be replaced by new ones. More than 51 lakh light motor vehicles (private and commercial) are more than 20 years old. 

oNew advanced vehicles will be comparatively safer. For example, new cars come with superior safety features.

Impact on the Vehicle Industry

• Lower Emissions: Removal of older vehicles could lead to a 10-12% reduction in vehicular pollution.
• Improved Air Quality: Effective policy implementation could reduce CO2 emissions by 15% annually.