Editorial

Published: Dec 29, 2021
Updated: Dec 29, 2021

Vehicle scrap law, win-win for all

New Delhi has finally greenlighted the much-awaited vehicle scrapping policy. After the announcement of the government’s intention in the Union budget speech by Finance Minister Nirmala Sitharaman, Transport Minister Nitin Gadkari recently launched the policy aimed at phasing out unfit and polluting vehicles in an environment-friendly manner. According to the tentative schedule, in October 2021 the rules for fitness scrapping centres will be released, on April 1, 2022 fitness testing for government and PSU. Vehicles will be undertaken, on April 1, 2023, fitness testing for heavy commercial vehicles will be performed, and on June 1, 2024, fitness test rules will be rolled out for other vehicles.

According to the Union Ministry for Road Transport and Highways, the policy will give a 30 per cent boost to the Indian automobile industry, from the current Rs 4.5 lakh crore turnover to Rs 10 crore over the coming years, with the export component shooting up from Rs 1.45 lakh crore at present to Rs 3 lakh crore. Again, the availability of scrap material such as steel, plastic, rubber and aluminium will increase, which can be used in manufacturing automobile parts which, in turn, can reduce costs by 30 to 40 per cent. Also, the policy can go a long way in promoting new technologies with better vehicle mileage, besides promoting green fuel and electric mobility. At the same time, it can also decrease the country’s huge Rs 10 lakh crore crude oil import bill. What is more, the move can attract new investments of around Rs 10,000 crore and create as many as 35,000 lobs.

According to the policy, private vehicles will be deregistered after 20 years if found unfit or in case of failure to renew registration. From the date of original registration, enhanced re-registering will be applicable on private vehicles from the 15th year. Vehicles belonging to the Central government, state governments, municipal corporations, panchayats, state transport undertakings, public school undertakings and autonomous bodies with the Union and state governments may be deregistered and scrapped after 15 years from the date of registration.

While vehicle scrapping will be voluntary, the policy makes it clear that it is mandatory for all vehicles to undergo a fitness test once their registration cycle is over. If a vehicle fails the fitness test, it will not be issued a renewable certificate. All unfit vehicles will have to be mandatorily scrapped.

In order to make the policy successful, the government plans to offer tax concessions and incentives. But it should be realised that the task, though very important, is a gigantic one. There are over 17 lakh medium and heavy commercial vehicles in the country that are older than 15 years without any valid fitness certificates, 51 lakh light motor vehicles older than 20 years and 34 lakh light motor vehicles older than 15 years.

In order to make the policy workable, the government will have to make finance for new vehicles available to needy people besides opening automated fitness centres and vehicle scrappage centres across the country.

The new policy will undoubtedly prove to be a boon for the automobile industry which is passing through a recessionary phase of late. Demand for new vehicles will encourage the industry to bring out new models. At the same time, it will reduce pollution, fulfilling India’s climate commitments, improving road and vehicular safety, improving fuel efficiency and increasing the availability of low-cost raw materials for the auto, steel and electronics industries. At the same time, the government will have to pay serious attention to two issues, viz., concessions to the second-hand vehicle market and funding for needy people like lorry owners and taxi drivers.