Prime Minister Narendra Modi Launches Vehicle Scrappage Policy

83 0

Shazneen Mistry

www.mediaeyenews.com

Prime Minister Narendra Modi launched the National Automobile Scrappage Policy at the Investor Summit in Gujarat via video conferencing and urged youths and startups to join the program. The policy aims to make the nation "clean, congestion-free and induce convenient mobility". The policy mandates the scrapping of old private and commercial vehicles if they fail fitness tests.

This is a government-funded program to replace old vehicles on Indian roads, reduce pollution, create job opportunities, and boost demand for new vehicles. Many countries including the US, Germany, Canada, and China have introduced vehicle scrappage policies to boost their respective automotive industries and check vehicular pollution. For instance, the US has implemented the Car Allowance Rebate System (CARS), also called the Cash for Clunkers program, which offers credit incentives on scrapping older vehicles and replacing them with new and more fuel-efficient vehicles.

On February 1, 2021, Finance Minister Nirmala Sitharaman stated in her annual budget speech, “The government will announce a voluntary vehicle scrapping policy to phase out old and unfit vehicles.” She added, the move will help in encouraging fuel-efficient, environment-friendly vehicles, thereby reducing vehicular pollution and oil import cost.  The scrappage policy will not only help in the reduction of air pollution by 25 to 30 percent but will also help in improving road safety.

On March 18, 2021, Nitin Gadkari, Minister for Road Transport & Highways, introduced the much-awaited vehicle scrappage scheme in the Lok Sabha. According to the new policy, commercial vehicles of more than 15 years and passenger vehicles of more than 20 years will have to be mandatorily scrapped if they don't pass the fitness and emission tests. Also, government departments will have to let go of their vehicles after they are used for 15 years.

The idea is to phase out cars and commercial vehicles older than 15-20 years to slash urban pollution levels and stimulate automotive sales, which continue to suffer during India’s post-COVID recovery phase. Additionally, the vehicle scrappage policy is also said to be a part of a stimulus package majorly requested by the original equipment manufacturers (OEMs) to infuse their demand. The minister added that the government plans to incentivize owners of old vehicles to scrap these through registered scrap centers. The policy, which also recommends the mandatory scrapping of all government vehicles over 15 years old, applies only to four-wheeled vehicles.

All government and PSU-owned vehicles older than 15 years will be scrapped by October 1, 2022. There will be mandatory fitness testing for heavy-duty vehicles by October 2023; the same will be done for other vehicles by October 1, 2024

 Manufacturers currently offering scrappage schemes are-

  • Ford Scrappage Scheme.
  • Hyundai Scrappage Scheme.
  • Kia Scrappage Scheme.
  • Mazda Scrappage Scheme.
  • Toyota Scrappage Scheme.

 

Related Post

Leave a comment

Your email address will not be published. Required fields are marked *