Finance Minister Nirmala Sitharaman officially announced the vehicle scrappage policy in India while presenting the Union Budget 2021-2022.
From quite a long time, the authorities were discussing the scrappage policy but it was finally confirmed during the Budget announcement. Recently, Union Minister for Road Transport and Highways, Nitin Gadkari, also highlighted the policy, which is expected to be implemented in the upcoming days.
Earlier, Government announced new ‘scrappage policy’ to remove old vehicles off the road
Here is a look at the key takeaways:
- Under this policy, private vehicles and commercial vehicles which are over 20 years old and over 15 years old will have to undergo the fitness tests. Fully automated fitness test facilities would be established on a public-private partnership (PPP) basis without any scope for human intervention.
- People who would be found driving vehicles that have failed the automated test will have to face substantial penalties, and such vehicles could also be impounded.
- Vehicles older than 8 years that pass the automated tests will be subjected to a ‘green tax’, and owners would have to pay additional 10 per cent to 25 per cent of road tax during the renewal of the vehicle’s fitness certificate.
- This policy is devised to promote sales of new vehicles with improved fuel efficiency and low pollution levels. Slashing India’s expenditure of around Rs 10 lakh crore on crude imports is also the motto behind this decision.
- As per Nitin Gadkari, people will be eligible for benefits and incentives while purchasing a new vehicle as a part of the policy in case they voluntarily get their old vehicle scrapped. After the implementation of this policy, around 1 crore aging vehicles would be scrapped.
- Gadkari said that this policy is expected to create around 50,000 jobs and attract investments around Rs 10,000 crore.
The minister exuded confidence in the automobile industry and said that more details of the policy would be unveiled soon.