Transport Ministry issues draft rules for vehicle scrapping policy

Vehicle owners willing to scrap their old ones are likely to get incentives as union minister for road transport and highways Nitin Gadkari unveiled the vehicle scrapping policy on Thursday.

The union government proposed to offer a road-tax rebate of up to 25 per cent for personal vehicles and up to 15 per cent for commercial vehicles.

The vehicle manufacturers are also advised to provide a discount of 5 per cent on purchase of new vehicle against the scrapping certificate.

In addition, the registration fee may also be waived for purchase of new vehicle against the scrapping certificate.

Scrap value for the old vehicle given by the scrapping centre, which is approximately 4-6 per cent of ex-showroom price of a new vehicle.

Announced first in the Union Budget 2021, the policy seeks to reduce population of old and defective vehicles, achieve reduction in vehicular air pollutants to fulfil India’s climate commitments, improve road and vehicular safety, achieve better fuel efficiency, formalise the currently informal vehicle scrapping industry and boost availability of low-cost raw materials for automotive, steel and electronics industry.

“Older vehicles pollute the environment 10 to 12 times more than fit vehicles and pose a risk to road safety, the policy is aimed at creating an eco-system for phasing out of unfit and polluting vehicles," Gadkari said.

"The ecosystem is expected to attract additional investments of around Rs 10,000 crore and 35,000 job opportunities. In the next few weeks, draft notifications, will be put out in the public domain for a period of 30 days to solicit comments and views of all involved stakeholders," said a government release.

The criteria for a vehicle to be scrapped is primarily based on the fitness of vehicles through automated fitness centres in case of commercial vehicles and non-renewal of registration in case of private vehicles. 

A vehicle failing the fitness test or failing to get a renewal of its registration certificate may be declared as end of life vehicle. Criteria to determine vehicle fitness will be primarily emission tests, braking, safety equipment, among many other tests which are as per the Central Motor Vehicle Rules, 1989.

The policy proposes the following:

Commercial vehicles be de-registered after 15 years in case of failure to get the fitness certificate. As a disincentive measure, increased fees for fitness certificate and fitness test may be applicable for commercial vehicles 15 year onwards from the date of initial registration.

Private Vehicles be de-registered after 20 years if found unfit or in case of a failure to renew registration certificate. As a disincentive measure, increased re-registration fees will be applicable for private vehicles 15 year onwards from the date of initial registration.

All vehicles of the Central government, state government, municipal corporation, panchayats, state transport undertakings, public sector undertakings and autonomous bodies with the union and state governments may be de-registered and scrapped after 15 years from the date of registration.

The scheme will also provide strong incentives to owners of old vehicles to scrap old and unfit vehicles through registered scrapping centres, which will inturn provide the owners with a scrapping certificate.

The ministry of road transport and highways will also promote setting up of registered vehicle scrapping facility (RVSF) across India and will encourage public and private participation for opening up of such centres.