Exclusive | Centre may unveil vehicle scrappage policy next week

The Ministry of Road Transport and Highways will set up a model vehicle fitness centre in each state and encourage setting up of registered fitness centres under the public-private partnership model under the upcoming vehicle scrappage policy, Moneycontrol has learnt.

The new policy, formally announced by Finance Minister Nirmala Sitharaman in the Budget, will include details of incentivising scrappage, disincentives for retaining old vehicles, and rules for setting up scrappage centres and fitness centres, said a senior government official.

The road ministry will also encourage state governments to set up fitness centres in each district as part of the scheme. The scheme is likely to be unveiled by next week, the source said.

Car makers seek quick rollout, heavy customer incentives under scrappage policy

Automated fitness testing centres will be used to conduct compulsory tests on commercial vehicles older than 15 years and personal vehicles older than 20 years. If a vehicle is deemed fit it will be issued a fitness certificate to extend its life cycle.
However, the registration fee for older vehicles will be hiked steeply. States will be permitted to impose an additional green tax on older vehicles to discourage retention of older vehicles.

Finance Minister Nirmala Sitharaman, while presenting the Union Budget for 2021-22, had said a policy to voluntarily phase out old and unfit vehicles would be unveiled.

What the vehicle scrappage policy means for private car owners, explained

"This (scrappage policy) will help in encouraging fuel-efficient, environment-friendly vehicles, thereby reducing vehicular pollution and oil import bill," the minister said.

Stakeholders from the automobile industry have said the policy should provide incentives for scrapping and not just disincentive those who are not scrapping their vehicles.