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Vehicle Scrappage Policy: Challenges and Suggestions

Synopsis: Vehicle Scrappage policy will work if incentives are aimed at increasing fuel-efficiency.

Introduction 

The Transport Ministry announced the Vehicle Scrappage policy, after the move for a green tax on ageing and polluting automobiles. This step promises economic benefits, a cleaner environment, and thousands of jobs.

  • Vehicles belonging to the government and the public sector will be scrapped by April 1, 2022. It will require another year to identify junk heavy commercial vehicles through compulsory fitness checks and other vehicles by 2024. 
  • Vehicle scrappage and replacement are viewed internationally as a path to revive COVID-19-affected economies by favouring green technologies, notably electric vehicles (EVs). It is an initiative to achieve net zero emissions by mid-century under Paris Agreement commitments. 

What are the challenges in implementing the vehicle scrappage policy successfully?

Enforcement of this system is important to get the vehicles scrapped once they are found unfit for use and to stop them from moving to smaller towns.

  1. Firstly, states must support this step by providing road tax and registration discounts. The automobile industry is expected to offer genuine discounts on new vehicles. 
  2. Secondly, the centre has the difficult task of making sure that the scrappage plan gets the state’s support
  3. Thirdly, 1.7 million heavy commercial vehicles do not have fitness certificates. This poses the biggest challenge. Many of these vehicles cannot get replaced quickly in the absence of financial arrangements for small operators. 
  4. Fourth, Fitness testing will be a difficult task. There is a requirement for a huge and reliable system of automated fitness checking infrastructure. It will measure the roadworthiness of commercial and private vehicles after 15 and 20 years. 

Suggestions 

  • Firstly, the automobile industry is important. Its share before COVID-19 was about 7.5% of GDP with significant downstream employment. The Centre has to arrive at a balanced solution and incentivize the manufacturers of fuel-efficient vehicles.
  • Secondly, implementation of very high standards and increased taxes on fuel consumers, without prioritizing fuel efficiency is not correct. It will only repeat the mistakes of vehicle exchange programmes abroad. They failed to realise full environmental benefits and taxpayers ended up subsidising inefficiency. 
  • And lastly, ecological scrapping, as a concept, must lead to high rates of materials recovery, reduce air pollution, mining and pressure on the environment.

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