Union Road and Transport Minister Nitin Gadkari, in February, had said that the policy would cover over 1 crore light, medium and heavy motor vehicles. “The policy would cover an estimated 51 lakh light motor vehicles (LMVs) that are above 20 years of age, while another 34 lakh LMVs are above 15 years. It would also cover 17 lakh medium and heavy motor vehicles, which are above 15 years, and currently without valid fitness certificates”.
Cars aged more than eight years would have to go for a fitness test. If they fail this test, customers would not be allowed to drive the car on the road anymore. But if the car passes this test, a green tax (roughly 10-25 percent) would be charged every time you renew the fitness certificate, which itself would be valid for five years.
Here’s what can be expected from the new scrappage policy:
- Car owners will be asked to scrap vehicles older than 15 years and purchase new ones instead.
- The government provides financial or tax-based benefits to consumers on the purchase of new vehicles.
- This scrappage policy is beneficial in reducing air pollution by removing older and more polluting vehicles from the roads.
- The policy is aimed at creating a demand stimulus in the auto sector. The automobile sector, especially the manufacturers, were struggling even before the COVID-19 pandemic struck.
- Newly purchased vehicles will be exempted for the payment of fees for a registration certificate and assignment of the new registration mark, only upon scrapping the old vehicle in the same category.
- It would lead to recycling of waste metal, improved safety, reduction in air pollution, reduction in oil imports due to greater fuel efficiency of current vehicles, and stimulate investment.
