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What is Vehicle Scrappage Policy?

Karan Sharma Karan Sharma 04 February 2021

The Indian automobile industry's long-awaited hopes may see the end of the tunnel in the vehicle scrappage policy. Introduced by the finance minister in the union budget 2021 and coming into effect from April 2022. Now the big question that remains to be seen is will it help boost vehicle sales or not?

Vehicle Scrappage policy

As per the latest notification, the finance minister Nirmala Sitharaman has announced (in the Budget 2021 speech) the implementation of a nation-wide Vehicle Scrappage Policy. The intention is to boost automotive sales and reduce urban pollution across India. The policy will come into effect from 1st April 2022.

As per this policy, vehicles (car and commercial) that are older than 15 years to 20 years will be phased out over a period of time. This means that vehicles older than 20 years will have to go through a fitness test conducted in automated fitness centres across India. Failure to me the fitness criteria will lead to the vehicle getting scrapped permanently.

What will this policy achieve?

This policy's objective is to help remove 20 or 15 years old cars and commercial vehicles from the roads and achieve a cleaner environment by reducing pollution levels. It will also help boos auto sales, which have been suffering heavy blows for quite some time. If you wish to use your vehicle in India that is older than 20 years, your vehicle will have to undergo a fitness test. This test will determine whether your vehicle is fit to run on roads or should be sent straight for the scrap heap.

What is the Cost of the Fitness Test?

As mentioned above, a fitness test will be applicable for vehicles older than 20 years. The entire cost of the fitness test, along with the fitness certificate, will be approximately Rs. 40,000. You will also have to pay 'Green Tax' separately while renewing your four-wheeler registration post 15 years. The fitness test will be conducted across India and will be valid for five years. The objective is to ensure that car owners maintain their vehicles in an orderly fashion and keep them environment-friendly. On the fitness certificate expiry, you again have to get a fresh certificate by paying Rs. 40,000/-. This high certification cost will dissuade people from using their old vehicles and encourage them to buy a new car.

How Much is Green Tax?

The government has proposed that car owners will be required to pay 10-25 percent of the respective road tax while renewing the fitness certificate. This amount will vary as road tax is different from one city to another; it will also consider the quality of air pollution.

What if My Car Fails the Fitness Test?

If your four-wheeler fails to pass the fitness test, you will not receive a fitness certificate. As per law, your vehicle will be considered unregistered/illegal, and you will not be allowed to drive it on Indian roads. If your car fails the test more than three times, it will be sent straight to the scrapyard.

Karan Sharma
Written by Karan Sharma
Content Strategist at Coverfox.