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The Scrappage policy will be applicable for private cars from 2024, heavy trucks from 2023

Prime Minister Narendra Modi has launched the Voluntary Vehicle Fleet Modernisation Programme, or better known as the automotive scrappage policy. The PM launched the policy virtually at the Investor Summit in Gujarat. The vehicle scrappage policy has been in the works for a while now, and it finally gets the green light from the government. The PM said that the policy will bring in investments of around ₹ 10,000 crore. He also said that Alang in Gujarat can become the hub for vehicle scrapping.

Adding further, the PM in a series of tweets wrote, “The launch of Vehicle Scrappage Policy today is a significant milestone in India’s development journey. The Investor Summit in Gujarat for setting up vehicle scrapping infrastructure opens a new range of possibilities. I would request our youth & start-ups to join this programme.”

“Vehicle scrapping will help phase out unfit & polluting vehicles in an environment-friendly manner. Our aim is to create a viable #circulareconomy & bring value for all stakeholders while being environmentally responsible.”

He also said that the current method of scrapping materials is not productive.

Speaking about the benefits of the scrappage policy for the common man, PM Modi said, “Firstly, a certificate will be given on scrapping of the old car, which will ensure that an individual does not have to pay registration fees while buying a new car. He will also get a discount on road tax. Secondly, a person will save money on maintenance cost, repair cost and fuel efficiency of the old car. The third benefit is directly related to life. There will be some relief from the high risk of road accidents due to old vehicles and old technology. Fourth, it will reduce the harmful impact of pollution on our health.”

“A vehicle will not be scrapped just because it is old. Fitness tests will be conducted at scrappage centres and only after that will it be scrapped, that too, as per scientific methods,” PM Modi said, as the fifth and final benefit.

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PM Modi said that owners scrapping their cars will not have to pay registration fees when buying a new car. They will also get a discount on road tax.

“A vehicle will not be scrapped just because it is old. Fitness tests will be conducted at scrappage centres and only after that will it be scrapped, that too, as per scientific methods,” PM Modi said.

Speaking at the event in Gujarat, Union Minister for Road Transport & Highways (MoRTH) Nitin Gadkari said that the scrappage policy likely lead to a cut in raw material costs by around 40 per cent. About ₹ 22,000 crore worth of scrap steel is imported in the country, and scrapping old vehicles will help reduce dependency. The minister also said that the policy will help the country become an industrial hub of automotive manufacturing.

The government will also set-up testing centres across all districts using the public-private partnership (PPP) model, Gadkari said further.

The announcement has backing from the automotive sector that has been recovering from one its worst slumps. Speaking about the new policy, Venkatram Mamillapalle, Country CEO & Managing Director, Renault India said, “The move by the Hon’ble Prime Minister in launching the Vehicle Scrappage Policy is a welcome move after the initial policy was formulated in March 2021 and shall support the auto industry of the new age ‘Bharat’. This scrappage policy will provide the much-needed impetus in countering the old methods of scrapping material, which was counterproductive. The new policy was imperative, long-awaited and will support the automobile industry and the ancillary support industry creating a win-win for all. The framework will augur greater investments and significantly prune the raw material cost and will support the refurbishment of sheet metal recycling. The scrappage policy is a panacea that will provide the right propulsion in form of generating employment in the auto ancillary/scrappage space and make the sector more organised.”

Hardeep Singh Brar, VP & Head – Sales and Marketing, Kia India, said, “This launch of the much-awaited Vehicle Scrappage Policy could well be the game-changer that will ensure only environmentally friendly and safe vehicles are driven on Indian roads. This far-reaching move will create a positive impact not only for customers and the environment, but also provide a boost to a circular economy. The Hon’ble Prime Minister’s announcement will also help create greater avenues for industrial production and creating employment opportunities across allied sectors in the auto industry. We welcome this move by the government as it will boost the demand for newer cars, keeping in mind a fair treatment for all stakeholders involved in the entire process.”

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