Scrappage policy: 6.8 mn vehicles "unfit"
Finance Minister Nirmala Sitharaman, at the Union Budget 2021, announced the much-awaited vehicle scrappage policy to phase out 68 lakh (6.8 million) unfit and old vehicles.
The Ministry of Road Transport and Highways (MoRTH) will announce the scrappage policy in the next two weeks. The policy promises to help infuse fresh investments worth Rs 10,000 crore.
Under the scrapping policy, 51 lakh LMVs that are more than 20 years old will be scrapped in a boost to the automobile industry.
The government will offer financial or tax-based benefits to consumers who choose to scrap their old vehicle and purchase new ones.
Apart from environmental concerns, the policy is also aimed at increasing market demand. Hence, the Centre has proposed original equipment manufacturers (OEM's) to offer certain discounts on the new vehicles purchased after scrapping an old one.
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However, while the government is ready to launch the policy, a major challenge is the lack of infrastructure to implement it. Currently, only seven out of the 25 sanctioned automated fitness test centres are operational, and there are only two authorised scrapping centres, including one in Noida.
Scrapping these vehicles will reduce the population of defective and old vehicles, with 25-30% reduction in vehicular air pollutants and is expected to improve road safety, said Minister for Road Transport and Highways Nitin Gadkari.
Gadkari said that nearly 34 lakh light motor vehicles (LMV) are older than 15 years and 51 lakh LMVs are older than 20 years. Moreover, there are 17 lakh medium and heavy commercial vehicles older than 15 years without valid fitness certificates. The ministry will also explore the possibility of voice messages about the benefits of the scrapping policy in the mobile phones of vehicle owners and drivers at petrol pumps, dealers and service centres. The ministry will also adopt measures to prohibit any policy misuse for scrapping any stolen vehicle.