Cabinet Note Formulated for Vehicle Scrappage Policy in India, Likely to Come into Effect Soon

The government has announced that a cabinet note has been written for the new vehicle scrappage policy in India. The Ministry of Road Transport and Highways has reportedly formulated a note on the creation of an ecosystem for voluntary and environment-friendly phasing out of old polluting vehicles.

A month ago, a Cabinet note on the issue is ready and sent for further consultations with the stakeholders on PMO directions.

“The Ministry of Road Transport and Highways has formulated a note for the Cabinet on creation of an ecosystem for voluntary and environment-friendly phasing out of unfit and old polluting vehicles," Minister of State for Road Transport and Highways VK Singh said in reply to a question in the Rajya Sabha.

In July last year, the Centre had proposed amendments to the motor vehicle rules to allow scrapping of vehicles older than 15 years.

Further, in a draft notification, the government proposed renewal of fitness certificates for vehicles older than 15 years every six months instead of the current one year.

Earlier this month, Transport and Highway Mnisister Nitin Gadkari had confirmed that the policy was in its final stages. Gadkari spoke at the 60th ACMA Annual Session which was held virtually. In connection with the scrappage policy, he informed the session that the scheme is expected to receive the Centre’s approval in a month’s time or even earlier.

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The policy is expected to encourage customers to go in for new purchases which will be backed up by government incentives in lieu of their old vehicles. Significantly, this move is considered to be the most vital element of any further package to prop-up the sector’s growth. Besides, he urged the auto component sector to increase exports and strive for quality manufacturing.

He had said that the government is now of a mindset to increase the country’s exports and limit imports by imposing a duty. On the infra push, he said that Centre will build 22 ‘Green Expressway Projects’ and work on some have already started.

In addition, he called upon the industry to set up clusters for automobile manufacturing next to the upcoming expressways.

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