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Voluntary Vehicle-Fleet Modernisation Programme

What is the news?

The Union Road Transport and Highways Minister announces the Voluntary Vehicle-Fleet Modernisation Programme. It is also known as the Vehicle scrapping policy.

Aim of the Policy:

  • The policy aims to create an ecosystem to phase out unfit and polluting vehicles. It will reduce pollution, improve fuel efficiency, and increase the government’s revenue collection from the sale of new vehicles.

When will the policy get applied?

  • The policy will kick-in for the government vehicles from April 1, 2022.
  • The mandatory fitness testing for heavy commercial vehicles will start from April 1,2023 and,
  • For all other categories of vehicles, including personal vehicles, it will start in phases from June 1,2024.

Key Features of the Policy:

  • Firstly, a vehicle has to undergo fitness tests after the completion of 20 years in the case of privately-owned vehicles, and 15 years in the case of commercial vehicles.
  • Secondly, any vehicle that fails the fitness test or fails to renew its registration certificate may get declared as an End of Life Vehicle. These vehicle owners will be encouraged to scrap the vehicles.
  • Thirdly, vehicle re-registration fees will increase to discourage people from running old vehicles.
  • Fourthly, automated fitness centres would get established throughout the country to ease vehicle scrapping.
  • Fifthly, all government vehicles and those owned by PSUs will get de-registered after 15 years.
  • Lastly, vintage cars will get exempted from this policy. A separate guideline will get formulated to regulate them.

Incentives for Scrapping

To lure owners into vehicles scrapping policy, the Government has suggested the following ways:

  • A vehicle’s scrap value of the ex-showroom price, ranging from 4-6%, will be given to the owner if they choose to vehicle scrap policy
  • A rebate of up to 25% will get in Road Tax
  • Vehicle manufacturers will be advised to give a 5% discount on new vehicles against a scrapping certificate.
  • So, in total, benefits of up to 10-15% can be availed on the older vehicles, who have reached the end of their lifecycle.

Source: Indian Express

Vehicle Scrappage Policy and the associated challenges: Explained

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