Vehicle Scrappage Policy in India - All You Need to Know


Indians always seem to hold a sentimental value towards their first vehicle. We find it difficult to sell or dispose of our cars even after 10-15 years of use. However, these vehicles could end up causing a lot of negative effects on the environment. Times are definitely changing, and our country is making a conscious effort to bring in sustainable development plans. To protect our environment from further pollution, the government is planning to introduce a vehicle scrappage policy soon. Let us learn more about what this policy is all about.

  1. What is the Vehicle Scrappage Policy?
  2. What are the Effects of the Scrappage Policy
  3. How Will the Vehicle Owners Benefit? 
  4. Too Late, or Better Late Than Never?

What is the Vehicle Scrappage Policy?

According to a CNN report in February 2020, India has 21 of the world’s 30 cities with the worst air pollution. The carbon emissions from end-of-life vehicles (ELV) is one of the biggest contributors to air pollution. These old cars have already caused a major health crisis in cities such as Delhi. In fact, almost 5 years ago, the National Green Tribunal had ordered cars older than 15 years from plying on the roads in Delhi-NCR. But this order was enforced only much later. It has not been very successful due to the absence of government-operated scrapping units.

In July 2019, the Central Government held discussions for bringing essential changes to the motor vehicle rules throughout India. Currently, the fitness certificate for commercial vehicles older than 15 years has to be renewed every year. The government has proposed to change the renewal process to once every six months.

But, the major change to the motor vehicle rules would be the introduction of the Vehicle Scrappage Policy. The government suggested the scrapping of vehicles that had exceeded 15 years of usage. This meant that old vehicles would not be allowed to run on our Indian roads if it is older than 15 years. The policy would basically target old vehicles that are approaching end-of-life. This essential scheme which was initially implemented in Delhi will now apply to every state in India.

Reports have stated that the Minister of Road and Highways, Nitin Gadkari, and the president of the Society of Indian Automobile Manufacturers (SIAM) are in talks to implement the policy at the earliest. 

What are the Effects of the Scrappage Policy

As we have already mentioned, this policy would help to reduce carbon emissions that arise from these old cars. This could be one of the most important policies that support green initiatives by the government.

Apart from the environmental concerns, the Vehicle Scrappage Policy could also help to increase demand in the market. This means that new vehicles that are launched in the automobile industry could get a major boost in demand. Kenichi Ayukawa, the President of Siam is also the CEO of Maruti Suzuki India. This could be why SIAM is encouraging the government to implement the scrapping policy at the earliest. The policy could also reduce India’s steel import, as the metal deposits from the scrapped cars could be recycled and used for other purposes. So, we can say that the overall benefit of this policy would help our country to become self-sufficient and boost domestic production.

How Will the Vehicle Owners Benefit? 

We know that the resale value of 15-year-old vehicles could be extremely low. The owners of these cars will get next to nothing if they are selling it by themselves. The Vehicle Scrappage Policy would help to tackle this problem as well. If these owners send their old cars to the scrapyard, they will be eligible for monetary compensation through the policy.

The Government is also in talks with automobile manufacturers, to provide discounts or other incentives to new car buyers if they have scrapped their old vehicles. Hence, it will be a win-win solution for everyone! 

Too Late, or Better Late Than Never?

Vehicle Scrappage Policies have been highly successful in countries such as Canada and the United Kingdom. But these policies have been around for more than a decade. So, we can state that India is quite late in implementing this highly important scheme. But, better late than never, right? 

This policy, if implemented with great accuracy and commitment, could be a major step towards securing India’s sustainable development goals. Let us hope that the guidelines will be followed, and important incentive schemes are provided for the automakers and car owners. Let us look forward to the latest notification from the government regarding the much-awaited scrappage policy.

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