Car Scrapping in India

How the Vehicle Scrappage Policy 2021 Will Transform India’s Mobility and Environment

Author

Philip Shane
January 14, 2024

Overview

The Vehicle Scrappage Policy 2021 is a government initiative to phase out old and polluting vehicles from the Indian roads and promote the adoption of cleaner and more efficient vehicles. The policy aims to reduce air pollution, fuel consumption, greenhouse gas emissions, and road accidents, as well as boost the automobile industry and create new jobs.

Some of the possible impacts of the policy on India’s mobility and environment are:

Improved air quality: The policy will remove about 51 lakh light motor vehicles and 34 lakh heavy motor vehicles that are over 20 years and 15 years old respectively. These vehicles account for 17% of the total vehicular population but contribute to 40-50% of the total vehicular pollution. By scrapping these vehicles and replacing them with newer and greener ones, the policy will reduce the particulate matter, nitrogen oxides, carbon monoxide, and hydrocarbons emissions from the transport sector.

Enhanced fuel efficiency: The policy will encourage the use of advanced technologies and alternative fuels such as electric, hybrid, biofuels, and hydrogen in the new vehicles. These vehicles will have better mileage and lower maintenance costs than the older ones. The policy will also incentivize the adoption of public transport and shared mobility, which will reduce the congestion and fuel demand on the roads.

Reduced greenhouse gas emissions: The policy will help India achieve its climate goals under the Paris Agreement, which include reducing the emissions intensity of its GDP by 33-35% by 2030 from the 2005 level. The transport sector accounts for about 14% of India’s total greenhouse gas emissions and is expected to grow rapidly in the future. By scrapping the old and inefficient vehicles and promoting cleaner and smarter ones, the policy will curb the growth of transport emissions and contribute to global efforts to mitigate climate change.

Increased road safety: The policy will improve road safety by removing vehicles that are unfit and unsafe for driving. The old vehicles often have poor brakes, tyres, lights, and other components that increase the risk of accidents. The new vehicles will have better features and standards that comply with the Bharat Stage VI emission norms and the Motor Vehicles (Amendment) Act, 2019. The policy will also create a database of the scrapped vehicles and their owners, which will help in tracking and preventing the illegal activities such as theft, fraud, and terrorism.

Boosted automobile industry: The policy will stimulate the demand and supply of the new vehicles in the Indian market. The policy will offer various incentives and benefits to the owners of the scrapped vehicles, such as discounts on the purchase of new vehicles, waivers on the registration fees and road taxes, and low-interest loans. The policy will also benefit the manufacturers, dealers, and service providers of the new vehicles, as well as the scrapping centers and recycling industries. The policy will create a circular economy and generate new opportunities for innovation, investment, and employment in the automobile sector.

Introduction

India is a country of diversity, culture, and innovation. It is also a country of challenges, opportunities, and aspirations. One of the biggest challenges that India faces today is the problem of old and unfit vehicles on its roads. These vehicles not only pose a threat to the environment, the public health, and the road safety, but also hamper the economic growth and development of the country.

To tackle this problem, the Indian Government has launched the Vehicle Scrappage Policy 2021, a program to phase out old and unfit vehicles from the country's roads and replace them with new and eco-friendly ones. The policy aims to reduce air pollution, enhance road safety, create employment opportunities, and boost the automotive industry in India.

But what is the Vehicle Scrappage Policy 2021? How does it work? What are its benefits and challenges? How will it impact the Indian mobility and transportation sector and the Indian society at large? These are some of the questions that this article will attempt to answer. This article will provide an overview of the Vehicle Scrappage Policy 2021, its objectives, its features, its benefits, and its challenges. The article will also discuss the implications and recommendations of the policy for the stakeholders and the future of the country.

The article is divided into four sections. The first section will explain what the Vehicle Scrappage Policy 2021 is and how it works. The second section will highlight the benefits of the policy for the economy, the environment, the society, and the vehicle owners. The third section will identify the challenges and limitations of the policy and how they can be addressed and overcome. The fourth section will conclude the article with a summary and a perspective on the policy.

The article is based on the information and data available from various sources, such as the Ministry of Road Transport & Highways, the NITI Aayog, the International Centre for Automotive Technology, and the World Health Organization. The article is intended to be informative, analytical, and critical. The article is also intended to be interesting, engaging, and accessible to a wide range of readers.

The article hopes to provide a comprehensive and balanced view of the Vehicle Scrappage Policy 2021 and its implications for the Indian mobility and transportation sector and the Indian society at large. The article also hopes to stimulate a constructive and meaningful dialogue among the stakeholders and the public on the policy and its future prospects.

Vehicle Scrappage Policy 2021: A Step Towards a Greener and Safer India

India is home to more than 1.3 billion people and over 300 million vehicles. With the rapid growth of population and urbanization, the demand for mobility and transportation has also increased. However, this also comes with a cost: air pollution, road accidents, fuel consumption, and greenhouse gas emissions.

According to the World Health Organization (WHO), India has 14 of the world's 20 most polluted cities. Air pollution is responsible for more than a million deaths in India every year. Road accidents are another major cause of mortality and morbidity, claiming over 150,000 lives annually. Fuel consumption and greenhouse gas emissions also contribute to climate change and energy insecurity.

To address these challenges, the Indian Government has launched the Vehicle Scrappage Policy 2021, a program to phase out old and unfit vehicles from the country's roads and replace them with new and eco-friendly ones. The policy aims to reduce air pollution, enhance road safety, create employment opportunities, and boost the automotive industry in India.

What is the Vehicle Scrappage Policy 2021?

The Vehicle Scrappage Policy 2021 is a government-funded program to scrap old and unfit vehicles and recycle them through a systematic process. The policy mandates that Heavy Commercial Vehicles (HCVs) older than 15 years and Private Vehicles (PVs) older than 20 years undergo fitness testing at Automated Testing Stations (ATSs). If they fail the test, they will be considered as End-of-Life Vehicles (ELVs) and will have to be scrapped.

The policy also provides incentives and benefits for vehicle owners who participate in the scrapping process, such as discounts on new vehicle purchases, reduced registration fees, and tax exemptions. The policy also imposes disincentives for owning old vehicles, such as increased re-registration fees, green taxes, and restrictions on plying in certain areas.

The policy is expected to cover about 51 lakh light motor vehicles, 34 lakh light commercial vehicles, and 17 lakh medium and heavy commercial vehicles that are older than the prescribed age limit and do not have a valid fitness certificate. The policy was expected to be implemented from April 1, 2023 for HCVs and from June 1, 2024 for other types of vehicles.

What are the benefits of the Vehicle Scrappage Policy 2021?

The Vehicle Scrappage Policy 2021 is expected to have multiple benefits for the economy, the environment, the society, and the vehicle owners. Some of the benefits are:

- Reduced air pollution and greenhouse gas emissions: Scrapping old and unfit vehicles will reduce the emission of harmful pollutants such as particulate matter, nitrogen oxides, carbon monoxide, and hydrocarbons. According to a study by the International Centre for Automotive Technology (ICAT), scrapping old vehicles can reduce the emission of these pollutants by 25-30%. Scrapping old vehicles will also reduce the emission of greenhouse gases such as carbon dioxide, which contribute to global warming and climate change. According to a study by the NITI Aayog, scrapping old vehicles can reduce the emission of carbon dioxide by 17-24%.

- Enhanced road safety and reduced accidents: Scrapping old and unfit vehicles will improve the roadworthiness and safety of the vehicles on the road. Old vehicles are more prone to breakdowns, malfunctions, and accidents due to wear and tear, lack of maintenance, and outdated technology. Scrapping old vehicles will reduce the risk of such incidents and save lives and property. According to a study by the Ministry of Road Transport and Highways (MoRTH), scrapping old vehicles can reduce road accidents by 10-12%.

- Increased fuel efficiency and reduced fuel consumption: Scrapping old and unfit vehicles will increase the fuel efficiency and performance of the vehicles on the road. Old vehicles consume more fuel than new vehicles due to lower mileage, higher friction, and lower combustion. Scrapping old vehicles will reduce fuel consumption and save money and energy. According to a study by the NITI Aayog, scrapping old vehicles can reduce fuel consumption by 25-30%.

- Boosted automotive industry and employment opportunities: Scrapping old and unfit vehicles will create a demand for new vehicles and stimulate the automotive industry. The policy will also create a circular economy and a value chain for scrapping, recycling, and manufacturing of vehicles and components. The policy will generate employment opportunities for skilled and unskilled workers in the scrapping, recycling, and manufacturing sectors. According to a study by the NITI Aayog, scrapping old vehicles can create 35 lakh direct and indirect jobs and add 0.3% to the GDP.

- Incentives and benefits for vehicle owners: Scrapping old and unfit vehicles will provide incentives and benefits for vehicle owners who participate in the scrapping process. The policy will offer discounts on new vehicle purchases, reduced registration fees, and tax exemptions for scrapping old vehicles. The policy will also offer a scrapping certificate, which will entitle the vehicle owner to a 4-6% discount on the ex-showroom price of a new vehicle. The policy will also waive the registration fees for the new vehicle and provide a 25% rebate on the road tax. The policy will also provide a 5% discount on the GST for the new vehicle.

What are the challenges of the Vehicle Scrappage Policy 2021?

The Vehicle Scrappage Policy 2021 is a visionary and ambitious policy that aims to transform the Indian mobility and transportation sector. However, the policy also faces some challenges and limitations that need to be addressed and overcome. Some of the challenges are:

- Lack of adequate infrastructure and capacity: The policy requires a large-scale and efficient infrastructure and capacity for fitness testing, scrapping, and recycling of vehicles and components. However, India currently lacks such infrastructure and capacity, especially in terms of Automated Testing Stations (ATSs) and Registered Vehicle Scrapping Facilities (RVSFs). According to a report by the MoRTH, India currently has only 1,000 ATSs and 50 RVSFs, which are insufficient to cater to the demand of the policy. The policy requires at least 5,000 ATSs and 500 RVSFs to be operational by 2024. The policy also requires a robust and transparent system for monitoring, verification, and certification of the scrapping and recycling process. The policy also requires a proper mechanism for disposal and management of the hazardous and non-hazardous waste generated from the scrapping and recycling process.

- Lack of awareness and acceptance among vehicle owners: The policy relies on the voluntary participation and cooperation of the vehicle owners for scrapping their old and unfit vehicles. However, many vehicle owners may not be aware of the benefits and incentives of the policy and may be reluctant to scrap their vehicles due to sentimental, financial, or practical reasons. Many vehicle owners may also be skeptical of the fitness testing and scrapping process and may fear fraud, corruption, or harassment. The policy needs to create awareness and acceptance among the vehicle owners and convince them of the advantages and necessity of the policy. The policy also needs to ensure that the fitness testing and scrapping process is fair, transparent, and hassle-free for the vehicle owners.

- Lack of coordination and regulation among stakeholders: The policy involves multiple stakeholders, such as the central and state governments, the automotive industry, the scrapping and recycling industry, the vehicle owners, and the civil society. The policy requires effective coordination and regulation among these stakeholders to ensure the smooth and successful implementation of the policy. The policy also requires a clear and consistent legal and policy framework to define the roles, responsibilities, and rights of these stakeholders. The policy also requires a harmonized and standardized system for fitness testing, scrapping, and recycling of vehicles and components across the country. The policy also requires a strong and independent enforcement and grievance redressal mechanism to ensure compliance and accountability of the stakeholders.

Conclusion

The Vehicle Scrappage Policy 2021 is a landmark policy that aims to transform the Indian mobility and transportation sector and make it greener, safer, and more efficient. The policy has multiple benefits for the economy, the environment, the society, and the vehicle owners. The policy also faces some challenges and limitations that need to be addressed and overcome. The policy requires a holistic and collaborative approach among the stakeholders to ensure its successful implementation and realization of its objectives. The policy is a step towards a cleaner and greener India and a better and brighter future for its people.

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Sources: 

(1) Vehicle Scrappage Policy in India: Highlights and Benefits - ACKO. https://www.acko.com/auto/vehicle-scrappage-policy/.