Auto majors have welcomed the new vehicle scrappage policy rolled out by Union Minister for Road Transport and Highways, saying it would encourage people to replace old vehicles while boosting the sector.

Under the policy, those choosing to voluntarily scrap their old vehicles will get financial incentives from the government and the automaker.

Vehicle Scrappage Policy: Key Highlights

• Personal vehicles older than 20 years and commercial vehicles older than 15 years will have to undergo a fitness test at the government registered ‘Automated Fitness Centres’.
• Vehicles that fail to pass the test will be declared as ‘end-of-life vehicles’, which would mean that the vehicle would have to be recycled.
• This will pave the way for older vehicles to be scrapped.
• In case, the vehicles pass the test, owners will have to pay a hefty fee for re-registration.
• According to the new policy, the re-registration fee would be hiked around eight times for personal vehicles, and around 20 times for commercial vehicles.

What Are Automated Fitness Centres?

• Every vehicle will have to go under a mandatory fitness test at the automated fitness centres.
• The government aims to have at least 718 centres across the country.
• These centres will test the vehicle’s emission, and braking and other safety components as prescribed by Central Motor Vehicle Rules, 1989.
• Appointments to these centres will have to be booked online and the fitness report will be electronically generated.

Change in Fee Structure

• The government has increased the fee for renewal and grant of fitness certificate of older vehicles up to 20 times.
• Here is the new fee structure for personal vehicles older than 15 years:

1. Two-wheelers – Rs 1,000
2. Three-wheeler/quadricycles – Rs 3,500
3. Cars – Rs 7,500

(Do not worry about the data. It is the state PSCs which may ask such information)

For commercial vehicles:

1. Passenger motor vehicles – Rs 10,000
2. Heavy goods/large motor vehicles – Rs 12,500

Benefits for buyers

• In case you decide to scrap your old vehicle at the registered scrapping centres, you will get approximately 4-6 per cent of the value of the vehicle’s ex-showroom price.
• The ex-showroom price is the cost of the vehicle, excluding the charges paid for registering the vehicle at RTO and insurance.
• Moreover, if you buy a new vehicle you will be given a flat 5 per cent discount on presenting a scrapping certificate.
• Registration fees will also be waived on the purchase of a new vehicle.

Obtaining a Scrapping Certificate

• Old vehicle owners will be able to formally scrap their registered vehicles at the automated scrapping centres.
• These centres will be linked with the Vahan database of the transport ministry.
• After you scrap your vehicle with the government registered agency, you will be provided with the scrapping certificate.
• You will then be eligible for the benefits proposed under the scheme.

Implementation

Tentative timeline for the new rules:

• Rules for fitness tests and government scrapping centres to come into effect – 1 October 2021
• The scrapping of government and PSU vehicles above 15 years of age to start – 1 April 2022
• Fitness testing for heavy commercial vehicles – 1 April 2023

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