DNA Exclusive: How scrappage policy will help vehicle owners

New Delhi: The Union Transport Minister Nitin Gadkari on Thursday announced the Vehicle Scrappage Policy Policy in the Lok Sabha. The policy which is touted as a top measure to boost the Indian automobile sector, will help to reduce pollution and increase road safety. The policy was announced by the Union finance minister Nirmala Sitharamn on February 1.

Zee News Editor-in-Chief Sudhir Chaudhary explains in simple language what is this new vehicle scrappage policy, what is its importance and how it will effect the people of India.

Under the scrappage policy, old vehicles will have to pass fitness test before re-registration and as per the policy government commercial vehicles more than 15 years old and private vehicles which are over 20 years old will be scrapped.

The scrappage policy is also important because older vehicles exert 10 to 12 times more pollution than fitted vehicles and are a bigger threat to road safety 

Old vehicles will be tested at the Automated Fitness Center and the fitness test of the vehicles will be conducted according to international standards. 

Emission test, braking system, safety components will be tested and the vehicles which fail in the fitness test will be scraped.

Not just this, the scrappage policy will also benefit vehicle owners. Nitin Gadkari said in the Lok Sabha that under the scrappage policy vehicle owners while buying a new vehicle will get a rebate of 4 to 6 per cent off the total price. 

Apart from this, the state governments may be advised to offer a road-tax rebate of up to 25% for personal vehicles and up to 15% for commercial vehicles.

Vehicle manufacturers will also give a discount of 5% to people who will produce the 'Scrapping Certificate' and registration fees will be waived off on the purchase of a new vehicle.

Currently there are around 51 lakh light motor vehicles in India which are more than 20 years old and there are 34 lakhs vehicles whcih are more than 15 years old.

There are about 17 lakh medium and heavy commercial vehicles which are more than 15 years old and operating without the required 'Fitness Certificate'. 

Another advantage of yhis policy is that scrap materials will get cheaper and that will reduce the production cost of the vehicle manufacturers. It also estimated to provide employment to about 3 crore 70 lakh people in the automoblile sector.

In the new fitness centers, 35 thousand people will get employment and an investment of Rs 10,000 crores will be pumped in. The government treasury is expected to get around Rs 30,000 to 40,000 crores of money through GST from this policy.

The rules for creating Fitness Test and Scapping Centers will come into effect from October 1, 2021 while the scrapping of vehicles of 15-year-old government and PSUs will start from April 1, 2022 and heavy vehicles from April 1, 2023.

Fitness test will be made mandatory for commercial vehicles and from June 1, 2024, fitness test will be made mandatory for all other categories of vehicles in a phased manner.