Old cars are one of the most running vehicles on Indian roads. There are some reasons behind that. Like the market of used vehicles in India, rising prices of cars, the country’s economic condition, and our love for the first car. But in India, the life of the vehicle is approx 10-15 years. After this, even our government did not allow us to continue with that. And for that government made a rule that you can not use a personal vehicle for more than 15 years (for commercial vehicles it is 20 years). Although, most of the owners sell their vehicles before that. But still, it is important because as I said the second-hand vehicle market is huge in our country.
And the Indian government launched the new Automobile Scrappage Policy to settle the issue of old vehicles. This is a good step for the automobile sector, the sake of the environment as well as our safety. So here we will know all about that policy and understand what is the importance of that policy and why it is important.
What is the Indian Automobile Scrappage Policy?
Prime Minister Narendra Modi launched the Indian Automobile Scrappage Policy 2021. Basically, this policy talks about a systematic process to recycle or discontinue the practice of old cars. The scrappage policy is for those old cars which are 15 years old for personal cars (for commercial vehicles it is 20 years) if they failed in the fitness test. This policy also features a kind of subsidy if anyone applies for the scrapping of their car. Which is 5-6% of the car’s ex-showroom price (at the time of purchase).
What is the goal of the Indian Automobile Scrappage Policy?
- Government planning to boost the economy by replacing old cars with a new one. As we know there are so many vehicles running on the road that are not able to pass the vehicle fitness test. So that they will go to scrapping and new cars will be sold quickly. So we will see a boost in the automobile sector. It will cover the losses during Automobile Chip Shortage.
- This policy is good for our environment. Because we all know that the unfit vehicles pollute so much. Air pollution, as well as noise pollution, is the prominent output we get from these vehicles. The removal of such vehicles helps improve the air quality of our environment and reduces the noise.
- The removal of old vehicles also makes a positive impact on the EV market. The government already announced the subsidy for Electric vehicles. So the policy will indirectly make a positive effect on the EV sector.
- This policy also ensures the safety of passengers. Most of the accidents happen because of uncontrolled vehicles. These unfit vehicles are bad in terms of controls but are running because of unawareness and cost-saving. So by removing these vehicles will prevent road accidents on some level.
What are the benefits of the Indian Automobile Scrappage Policy?
- An owner who chooses to scrap his old car will be given 4-6% of his vehicle ex-showroom price (the ex-showroom price, when he bought that vehicle).
- Also, he will get a rebate of 25% of road tax will be given to the person who scrapped his vehicle and bought the new one.
- After the scrapping, a certificate will be given to the owner. And by that vehicle manufacturers have been advised to give a 5% discount on new vehicle purchases.
What is the process?
The prime minister announced that the fitness centre will be opened all over countries. Where we can go in our old car to know whether it is fit or unfit. And getting a certificate of fitness or an EOLV (End Of Life Vehicle). After that maybe it will be processed for scrapping or maybe the owner can get a chance to rectify if the issue is normal and retain his old car. Well, it is not clear at the time.
It is a time when the electric revolution started in India with massive EV launches. The removal of gasoline vehicles will help this revolution indirectly but effectively. And we have to be ready for the change and motivating others to participate in the vehicle fitness programmes.
So this is the sum up of the scrappage policy and it is really a good step for our old cars. It will help our environment, ensures our safety from road accidents and the benefits will motivate the owner to scrap his vehicle if it is unfit or maybe it is compulsory. But this is also a masterstroke to boost the automobile sector as well as our economy.
If you want to know more about the electrical automobile world then go to our articles on