(This story was first published on 19 March 2021. It is being reposted from The Quint’s archives in the light of PM Narendra Modi launching the National Automobile Scrappage Policy on Friday, 13 August.)
Union Minister for Road Transport and Highways Nitin Gadkari on Thursday, 18 March, spoke about the new draft notification that will force owners of vehicles to pay hefty fee for re-registration of their vehicles.
The policy has been proposed to weed out the older feet of vehicles in India to reduce air pollution by 25-30 percent and help improve road safety as well. The vehicle scrappage policy was first proposed by Union Finance Minister Nirmala Sitharaman during Budget 2021. The policy is being touted as a step to boost the automobile sector.
“Once it is implemented, the scrappage policy will make India the world’s largest automobile hub in five years,” Gadkari said in the Parliament.
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.
Every vehicle will have to go under 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.
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:
For commercial vehicles:
In case you decide to scrap your old vehicle at the registered scrapping centres, you will get approximately 4-6 percent of the value of the vehicle’s ex-showroom price. The ex-showroom price is the cost of 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 percent discount on presenting a scrapping certificate. Registration fees will also be waived on the purchase of a new vehicle.
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.
Tentative timeline for the new rules:
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