Vehicle Scrappage Policy Launched | Everything You Need To Know

Vehicle Scrappage Policy Explained

Hon’ble Prime Minister Sh Narendra Modi has finally launched the Vehicle Scrappage Policy in India. The PM launched the policy at an investor’s summit in Gujarat.

Commenting on the same, PM Modi tweeted:

He further added that the Vehicle Scrapping Policy will help phase out unfit and polluting vehicles in an environment-friendly manner.

What is the Vehicle Scrapping Policy?

Simply put, the vehicle scrapping policy aims to pull old, unfit and polluting vehicles off the roads and put them through scrapping.

  • According to the motor vehicle law, an RC (Registration Certificate) for a passenger vehicle is valid for 15 years whereas, for a commercial vehicle this validity is for 10 years only.
  • Now, this scrappage policy will be applicable after the RC of passenger and commercial vehicles expires (10 and 15 years respectively).
  • Such vehicles then have to undergo a vehicle fitness test.
A Local Vehicle Scrapping Yard

It is to note that, a fitness certificate renewal will be required annually for commercial vehicles that are older than eight years.

When will the Vehicle Scrapping Policy come into effect?

As per the policy, personal vehicles older than 20 years, that have failed their fitness test or RC renewal will be de-registered from 1st June 2024.

The vehicle scrappage policy implementation for commercial vehicles will begin starting 1st April 2023

What kind of vehicle will be put through scrapping?

It is to note that vehicles meant for scrapping will not only be judged on the basis of age but will be put through a series of fitness tests at government standardised automated testing centres.

Car Scrapping In India
  • Such unfit vehicles can include; vehicles involved in natural disasters (like floods, fires, natural calamities), accidents that have compromised the vehicle structural integrity, vehicles involved in riots, vehicles that have become obsolete etc.
  • These vehicles will be declared “Unfit” and their RC will stand cancelled.
  • The Government will still permit 1 re-test given that the vehicle has undergone any repair or service ordered by the authority. However, If the vehicle still fails the re-test, it will be declared an ELV or End Of Life Vehicle.

Please note that the Vehicle Scrappage Policy is a voluntary scheme 

What is the Vehicle Fitness Test?

As per The Motor Vehicles Act, 1989, the registration of the vehicle is considered valid only if the vehicle has a valid and effective vehicle fitness certificate. As the name says, the vehicle fitness test is a set of parameters that decide if the said vehicle is non-polluting and fit to run on the roads. These tests include brake test, engine performance and emissions test and more.

Car Scrapping In India

A valid fitness test will be deemed necessary for any vehicle that seeks RC renewal after 15 years. This fitness certificate will be valid for 5 years. Moreover, the vehicle has to undergo a consequent fitness test every 5 years.

Incentives On Scrapping Your Old Car

The Government has declared that it will be incentivizing the voluntary vehicle scrappage policy.

  1. Owners of unfit vehicles who wish to scrap them will be compensated with a scrap value equivalent to 4% to 6% of the ex-showroom price of the new vehicle they would be buying.
  2. No registration fees will be levied on the purchase of a new vehicle, only if the owner produces a Certificate Of Deposit.
  3. The Centre has asked the State Government to offer concessions on road tax which can be up to 25% for non-transport vehicles and up to 15% for transport vehicles.
  4. The Center has also asked vehicle manufacturers to offer a 5% discount on the purchase of the new vehicle is provided with a Certificate Of Deposit.

What If You Don’t Scrap Your Old Car?

If you still decide to hold on to your old car after 15 years, be ready to pay up to 62X (commercial vehicles) for the renewal of the fitness certificate. (8X for private vehicles).

Moreover, the states will also charge a mandatory Green Tax that will be applicable over the road tax.

So, what are your thoughts on the new Vehicle Scrapping Policy in India. Will it help boost the economy and well the environment. Comment your thoughts below.

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