Title : VEHICLE SCRAPPING POLICY

Date : Nov 24, 2021

Description :

Based on a News Article published in the ‘The Hindu’ on 24^th November 2021 on Page Number 8

 

Useful for UPSC CSE Prelims and Mains (GS Paper II)

Background of the Vehicle Scrappage Policy:

 

• The Prime Minister recently unveiled the Vehicle Scrapping Policy/National Automobile Scrappage Policy via video conferencing while speaking at an Investor Summit in Gujarat.
• Under the Car Scrapping Policy, the Summit will attract investment in the establishment of vehicle scrapping infrastructure.

 

About the Vehicle Scrappage Policy:

 

• The government launched the Vehicle Scrapping Policy in March 2021.
• It is expected that the policy will cover 51 lakh light motor vehicles (LMVs) over the age of 20 and another 34 lakh LMVs over the age of 15.

 

Objectives of the Vehicle Scrappage Policy:

 

• The goal is to reduce the number of old and damaged vehicles on the road, reduce vehicular air pollution, and improve road and vehicular safety.

 

Provisions of the Vehicle Scrappage Policy:

 

• Fitness Test: Old vehicles will have to undergo a fitness test before being re-registered, and government commercial vehicles older than 15 years and private vehicles older than 20 years would be demolished, according to the regulation.
• Old automobiles will be examined at an authorised Automated Fitness Center rather than being discarded solely because of their age.
• Vehicles that fail the fitness test will be discarded.
• Emission tests, braking systems, and safety components will be checked.
• If the old car passes the test, the owner can keep driving it, but re-registration fees will be substantially higher.
• The Union Road and Transport Ministry has recently set rules for the registration of scrapping facilities, as well as their powers and scrapping procedures.
• State governments may be encouraged to offer a road-tax rebate of up to 25% for personal vehicles and up to 15% for commercial vehicles to encourage owners of old and unfit vehicles to trash them.
• Vehicle Discount: Vehicle manufacturers will offer a 5% discount to people who present the 'Scrapping Certificate,' and registration fees will be waived on new vehicle purchases.
• Increased re-registration fees for automobiles 15 years or older from the initial date of registration would serve as a disincentive.

 

Significance of the Vehicle Scrappage Policy:

 

• Scrap yards will be established: This will result in the establishment of more scrap yards throughout the country, as well as the effective recovery of waste from outdated automobiles.
• India had to buy scrap steel worth Rs 23,000 crore last year since its scrapping is ineffective and it is unable to recover energy and rare earth metals.
• 35 thousand people would be employed in the new fitness centres, which will be built with an investment of Rs 10,000 crores.
• Improved Revenue: As a result of the economic downturn caused by the bankruptcy of IL&FS (Infrastructure Leasing & Financial Services) and the Covid-19 pandemic, sales of heavy and medium commercial vehicles will increase.
• The government treasury is estimated to receive roughly Rs 30,000 to 40,000 crores as a result of this policy through the Goods and Services Tax (GST).
• Price reduction: The recycling of metal and plastic parts would result in significant price reductions for auto components.
• As scrapped materials become more affordable, vehicle manufacturers' production costs will decrease.
• Reduce Pollution: It will play a significant part in modernising the vehicular population by assisting in the phase-out of unfit and polluting cars across the country, as well as promoting a circular economy and a waste-to-wealth campaign.
• Older vehicles harm the environment 10 to 12 times more than newer vehicles, with an estimated 17 lakh medium and heavy commercial vehicles over 15 years old.

Tags : scrap policy, automobile