Voluntary Vehicle Scrapping Policy Will Include 5 Percent Rebate On Purchase Of New Car Nitin Gadkari

The Union Budget 2021-2022 saw the announcement of the Voluntary Vehicle Scrapping Policy. Now, the Union Minister for Road Transport and Highways, Nitin Gadkari, has announced that carmakers will offer a 5 percent rebate on the purchase of a new car if the customer has scrapped their old vehicle.

When this policy was announced, only a few details were revealed. It basically stated that if your car crosses the age of 20 (15 for commercial vehicles), it needs to get a fitness certificate. If it fails the test, it has to be scrapped. This policy was approved in the Union Budget 2021 and will be effective from April 1, 2022.

Revealing further details, Gadkari said, "There are four major components of the policy. Apart from the rebate, there are provisions of green taxes and other levies on old polluting vehicles. These will be required to undergo mandatory fitness and pollution tests in automated facilities. For this automated fitness centres would be required throughout the country and we are working in that direction."

The Ministry of Road Highways and Transport (MoRTH) had also proposed a green tax that will come into effect from April 2022. Vehicles over 15 years old will have to pay a green tax on renewal of registration certificate. Cities with higher levels of pollution will charge a larger amount (50% of road tax). The tax will also vary depending on the type of fuel. EVs, strong hybrids, and CNG vehicles will be exempted from the green tax.

Gadkari hopes this policy will generate employment opportunities and help with the recovery of the automotive sector which has been ailing since before the pandemic. The automated fitness centres will be set up under public-private partnerships. Driving a vehicle that has failed the test will result in a heavy fine as well as impounding.