Voluntary vehicle scrappage policy to phase out old and unfit vehicles announced

Union Finance Minister Nirmala Sitharaman, today, while presenting the paperless Union-Budget 2021-22, announced a voluntary vehicle scrappage scheme for private and commercial vehicle.

The vehicle scrappage policy announced by the FM is claimed to bring ₹43,000 crore business opportunity by boosting consumption in the auto industry and helping the environment.

While addressing the Lok Sabha, Sitharaman said, “We are separately announcing a voluntary vehicle scrapping policy to phase out old and unfit vehicles. This will help encourage fuel-efficient and environment-friendly vehicles, thereby reducing vehicular pollution and oil import bills.”

Giving a brief on the working of the policy she added, “Vehicles would undergo fitness tests in automated fitness centres after 20 years in case of personal vehicles, and after 15 years in case of commercial vehicles.”

The scrappage policy aims to take out the old polluting vehicles from Indian roads and send them to the scrapyard. The vehicle older than 15 yrs have very low resale value and pollute the environment at great extend. Sending them to scrapyards will offer the owners monetary compensation, which will help them to buy a new vehicle.

“The soft step towards the introduction of a voluntary scrappage policy is a welcome move. However, driving the implementation of the same through incentives/ disincentives and the necessary infrastructure is going to be critical,” says Mr Deepak MV, Co-founder & CEO, Etrio.

This policy will not only help clean the environment but also create demand in the auto industry and the recycling industry.

“We welcome the announcement of scrappage policy, which will unlock the value of old vehicles and also incentivize next-gen greener alternatives, awaiting the finer details of the policy,” says Mr Prasad Sreeram, Co-founder & CEO, COGOS Tech.

The Finance Minister informed that the details of the scheme will be separately shared by the ministry.

Speaking on the policy, Mr Gadkari said, “The policy is expected to boost the demand for heavy and medium commercial vehicles.”

Further adding, the minister said, that the material recycled will be useful for the automobile industry as it will reduce the cost of manufacturing cars, buses, and trucks, increasing India’s competitiveness in international markets.

He said recycled material from old vehicles will help reduce the prices. “We will take scrap from all over the world and here we will make an industry where we can use all new material and the cost will be less, and the industry will be more competitive. Then, we will get more export orders and the import will reduce,” Gadkari added.

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