Voluntary vehicle scrapping policy to cover 1 crore vehicles: Govt
This will help in encouraging fuel-efficient, environment-friendly vehicles, thereby reducing vehicular pollution and oil import bill, she said.
Stating that the policy would cover over one crore light, medium and heavy motor vehicles, Road Transport, Highways and MSMEs Minister Nitin Gadkari said details of the Voluntary Scrappage Policy will be declared within 15 days.
Stating that the policy would cover over one crore light, medium and heavy motor vehicles, Road Transport, Highways and MSMEs Minister Nitin Gadkari said details of the Voluntary Scrappage Policy will be declared within 15 days.
“The policy would cover an estimated 51 lakh Light Motor Vehicles (LMVs) that are above 20 years of age, while another 34 lakh LMVs are above 15 years. It would also cover 17 lakh medium and heavy motor vehicles, which are above 15 years, and currently without valid fitness certificates,” Gadkari said.
These vehicles are estimated to cause 10-12 times more pollution than the latest vehicles, he said.
Last month, the government had said it plans to impose a green tax on old polluting vehicles soon in a bid protect the environment and curb pollution while vehicles like strong hybrids, electric vehicles and those running on alternate fuels like CNG, ethanol and LPG will be exempted. The revenue collected through the green tax will be utilised for tackling pollution.
Under the scheme, transport vehicles older than eight years could be charged green tax at the time of renewal of fitness certificate at the rate of 10 to 25% of road tax, as per green tax proposal sent to states for consultations after cleared by the ministry.
Outlining the benefits of the scrapping policy, Gadkari said it would lead to recycling of waste metal, improved safety, reduction in air pollution, lower oil imports due to greater fuel efficiency of current vehicles, and stimulate investment. He said India will be an automobile manufacturing hub in the next five years.
He said demand for new vehicles will grow and the automobile industry will reach Rs 6 lakh crore from the present Rs 4.5 lakh crore.
Reacting on the announcement, Kenichi Ayukawa, President, Society of Indian Automobile Manufacturers (SIAM ) said, “Good macroeconomic growth will translate to good auto sector demand. Specifically, the vehicle scrappage scheme has good intent and the auto industry would be keen to work with the government on suggestions for maximizing benefits to the environment and society.”
Rudra Pandey, Partner, Shardul Amarchand Mangaldas & Co termed the policy as a positive step towards supporting the automobile industry, which has been hit hard in the past year due to the impact of COVID-19.
“The automobile industry had made a vehicle scrapping policy one of their principal demands to enable them to combat this situation. The policy is proposed to be introduced on a voluntary basis, and the intention is to phase out old and unfit vehicles (both commercial and personal) from Indian roads, which will not only result in a reduction in environmental pollution but will also boost the sales of new vehicles, including the production and sale of electric and hybrid vehicles,” he said.
Pandey said it is likely that the policy will provide for certain financial/ loan based incentives to be provided to customers who choose to scrap their old and polluting vehicles for newer alternatives.
“The policy will provide a fillip to the Indian government’s efforts to position India as a global automobile manufacturing hub, as well as benefit global automakers with manufacturing industries in India, including Japanese giants Suzuki, Toyota, Nissan, amongst others,” he said.
On July 26, 2019, the government proposed amendments to motor vehicle norms to allow scrapping of vehicles older than 15 years in a bid to spur adoption of electrical vehicles.
“We have submitted the proposal and I am expecting that we will get approval as early as possible for the scrapping policy,” Gadkari had said on January 15.
The minister had also said that once the policy is approved, India will become an automobile hub and there will also be a reduction in the prices of automobiles.
He had said recycled material from old vehicles will help reduce the prices, adding that the automobile industry’s turnover, which is Rs 4.5 lakh crore with Rs 1.45 lakh crore exports, will get a boost.
In May 2016, the government had floated a draft Voluntary Vehicle Fleet Modernisation Programme (V-VMP) that proposed to take 28 million decade-old vehicles off the road.
