IMPACTS OF THE VEHICLE SCRAPPAGE POLICY
In a much-awaited Union Budget 2021 speech, the Finance Minister emphasized the Vehicle Scrappage Policy. The purpose of the said policy is to systematically and periodically phase out the old private and commercial vehicles which are older than 20 or 15 years respectively.
As per the said Vehicle Scrappage policy, a 20-year-old private vehicle will have to undergo a fitness test which would entail a nominal cost. This is to be noted that the road tax and the possible green tax have yet not been included in the same cost. Details of the scheme will be separately shared by the Ministry of Road Transport and Highways in the midst of the month.[1]
Presently, as per the prevailing law, it is illegal to drive a car that hasn’t passed a fitness test, as it is considered unregistered. The owner cannot do away with the fitness test while going through the mandatory re-registration process, and in case if the vehicle fails the test, the same is considered as not registered, thus making it illegal to drive it on the road.
The policy shall come into effect from April 1, 2022. It is said to offer a monetary incentive to the owners sending their vehicles to the scrap heap. However, in the case where the vehicle fails the fitness test thrice, the owner wouldn’t be left with much of a choice but to scrap the same.
Table
Here is the table which lists the current fee structure related to the fitness certificate. This table is sourced from the Vahan Parivahan website.[2] However, the fee structure may change in the future or maybe slightly different for different RTOs.
| Sr. No. | Service | Fee |
| 1 | Conducting test of a vehicle for grant or renewal of a certificate of fitness | |
| Medium or Heavy motor vehicle | Manual: Rs. 600 | |
| Automated: Rs. 1000 | ||
| Three-wheeled or quadricycle or light motor vehicle | Manual: Rs. 400 | |
| Automated: Rs. 600 | ||
| Bike | Manual: Rs. 200 | |
| Automated: Rs. 400 | ||
| 2 | Grant or renewal of letter of authority | Rs. 15000 |
| 3 | Grant or renewal of a certificate of fitness for motor vehicle | Rs. 200 additional fees. |
| 4 | An appeal under rule 70 | Rs. 3000 |
| 5 | Issue of duplicate letter of authority | Rs. 7500 |
| 6 | Any application not covered under entries at Serial Nos. 1 to 14 above | Rs. 200 |
AIMS OF THE DRAFT POLICY
The main purpose behind rolling out this policy is to ensure that private vehicles and commercial vehicles which are older than 20 or 15 years respectively are being phased out. This shall help in achieving not just lower carbon emission as has been committed by per India’s Intended Nationally Determined Contribution (INDC) submissions at COP21 but also shall increase the employment opportunity in the said sector.
According to the Finance Minister, any private vehicle older than 20 years will have to undergo a fitness test which will be conducted at the automated fitness centers. These centers shall through this fitness test analyze and determine whether the vehicle should be allowed on the roads or be sent to scrap centers.
As per the proposed policy, nearly over 51 lakh vehicles, both private and commercial are over 20 years old. The scrapping of the same shall not just boost automotive industries but shall also possibly pave way for adopting newer technologies such as EVs.
[1] BUDGET 2021-2022, SPEECH OF NIRMALA SITHARAMAN, MINISTER OF FINANCE https://www.indiabudget.gov.in/doc/Budget_Speech.pdf
[2] https://vahan.parivahan.gov.in
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