Vehicle Scrappage Policy to phase out old and unfit vehicles
Union finance minister Nirmala Sitharaman in the Union Budget for financial year 2021-22 announced that the long-pending voluntary vehicle scrapping policy for phasing out of old vehicles that had been in the works since 2016. Scrappage policy will encourage fuel-efficient, environment-friendly vehicles on the road. Thereby it will reduce vehicular pollution and the oil import bill.
Key Features of the Vehicle Scrappage Policy
- Under the policy, vehicles would undergo fitness tests after a certain period of time. In the case of personal vehicles the duration is 20 years. In the case of commercial vehicles, this duration is 15 years.
- Each fitness test will cost approximately Rs 40,000. Other than that, old vehicles will have to pay green tax and road tax.
- If a vehicle fails a fitness test, it will not get a renewal certificate and won’t be able to run on the road.
- However, if it passes a fitness test, the vehicle will have to undergo a fitness test, after every 5 years.
- The aim of all these costs is to discourage consumers from keeping the older vehicle.