Vehicle scrappage policy and Incentives of Voluntary Vehicle-Fleet Modernization Program (VVMP) in India

On 18th March 2021, Road Transport & Highways Minister, Shri Nitin Gadkari announces ‘Vehicle Scrapping Policy’ or ‘Voluntary Vehicle-Fleet Modernization Program (VVMP)’ to phase out the unfit and polluting old vehicles. But, the policy will not be applicable on vintage cars.

Vehicle scrappage policy or Voluntary Vehicle-Fleet Modernization Program (VVMP) in India pdf to download (source: pib.gov.in):

Vehicle scrappage policy by MoRTH March 2021
Vehicle scrappage policy by MoRTH March 2021

Vehicle scrappage policy draft rule notification by MoRTH w.e.f. 1st Oct 2021:

The ministry has published the draft rule notifications dated 26.03.2021 for objections or suggestions, which shall be in the public domain for 30 days to solicit comments of all stakeholders. Otherwise, these rules come into force with effect from 1st day of October, 2021.

RVSF (Registered Vehicle Scrapping Facility) Registration and Functions of vehicle scrapping facility draft rule by MoRTH:

The Motor vehicles rule 2021 of Registration and Functions of vehicle scrapping facility. These provisions shall lay down the procedure for establishment of Registered Vehicle Scrapping Facility (RVSF). These will apply to all vehicles and their last registered owners, Automobile collection centres, Automotive Dismantling, Scrapping and Recycling Facilities and recyclers of all types of automotive waste products.

RVSF scope, criteria, guidelines, Application form in above draft:

  1. Powers and obligations of RVSF
  2. Conditions of Eligibility for RVSF
  3. Registration Procedure for RVSF
  4. Validity and renewal of Registration
  5. Criteria for Scrapping of Vehicles
  6. Right to Inspection by the Registration Authority
  7. Scrapping Procedure and documents of vehicles
  8. Certificate of Vehicle Scrapping issuance
  9. Installation of CCTV Cameras at the scrapping yard, in the customer and vehicle reception area
  10. Scrapping Yard space and ventilation criteria
  11. Applicable Act / Rules adherence to Motor, environment etc.
  12. Audits and Certifications of RVSF
  13. Appeal

RVSF Forms for application, approval, composite application and Certificate of vehicle Scrapping in above draft:

  1. Form-1, for application of Registered Vehicle Scrapping Facility (RVSF)
  2. Form-1A, Approval for setting up of Registered Vehicle Scrapping Facility (RVSF)
  3. Form-2, for composite application for Scrapping and Certificate of vehicle deposit type RVSF
  4. Form-3, for Annual return for financial year wise
  5. Form-4, for Certificate of vehicle Scrapping

The Objective of Vehicle scrappage policy in India:

  1. To reduce the number of old and defective vehicles from road.
  2. To achieve reduction in pollution and vehicular air pollutants to fulfil India’s climate commitments to the world, as older vehicles pollute the environment 10 to 12 times more than fit vehicles.
  3. To improve road and vehicular safety by phasing out the unfit and old vehicles.
  4. To achieve better fuel efficiency through new technologies in new vehicles.
  5. To formalize or standardise the currently informal vehicle scrapping industry to make it a competitive field.
  6. To boost availability of low-cost raw materials for automotive, steel and electronics industry from scrapped vehicles.
  7. To develop an eco-system of phasing out the unfit vehicles.

Benefits of Vehicle scrappage policy in India:

  1. This eco-system of Vehicle scrappage policy expects to bring Rs. 10,000 crore ($1.32 Billion) additional investments to the sector.
  2. The Vehicle scrappage policy expects to bring additional 35,000 jobs to the sector.
  3. The safety of riders and pedestrians both will improve due to strong vehicles and safety features like seat belt and air bags equipped in vehicle.
  4. Fuel efficiency will increase due to latest innovative technologies developed in the automobile sector, which will save the fuel bill of individual as well as save fuel bill in million dollars of oil-importer country like India.
  5. Environment will be cleaner and greener with the decrease in pollution.

How many vehicles will be qualified for Vehicle scrappage policy in India in 2020-21?

  1. At present, India has 51 lakh Light Motor Vehicles (LMV) like cars which are older than 20 years.
  2. India has 34 lakh Light Motor Vehicles (LMV) like cars which are older than 15 years.
  3. India has 17 lakh Medium and Heavy Commercial Vehicles which are older than 15 years

Vehicle scrappage policy proposes the following points:

1. De-registration of commercial vehicles in Vehicle scrappage policy in India:

  1. It is proposed that commercial vehicles be de-registered after 15 years in case of failure to get the fitness certificate. If the commercial vehicles failed in fitness test, the vehicle will be declared as ‘End of Life Vehicle.
  2. As a disincentive measure, increased fees for fitness certificate and fitness test may be applicable for commercial vehicles 15 year onwards from the date of initial registration. Means, after 15 years, the charges of getting fitness certificate and fitness test will be higher.

Criteria of scrapping of Commercial vehicles in Vehicle scrappage policy in India:

  1. For commercial vehicles, the primary criteria of scrapping is based on the ‘fitness of vehicles’ through Automated Fitness Centres.
  2. Criteria to determine commercial vehicle fitness will be primarily based on tests like emission tests, braking test, safety equipment among many other tests which are as per the Central Motor Vehicle Rules, 1989.
  3. A commercial vehicle failing the fitness test may be declared as ‘End of Life Vehicle’.

2. De-registration of Private vehicles in Vehicle scrappage policy in India:

  1. It is proposed that Private Vehicles be de-registered after 20 years if found unfit or in case of a failure to renew registration certificate. If the private vehicles failed in fitness test, the vehicle will be declared as ‘End of Life Vehicle.
  2. As a disincentive measure, increased fees for fitness certificate and fitness test may be applicable for commercial vehicles 15 year onwards from the date of initial registration. Means, after 15 years, the charges of getting fitness certificate and fitness test will be higher.

Criteria of scrapping of Private vehicles in Vehicle scrappage policy in India:

  1. For Private vehicles, primary criteria of scrapping is based on the ‘Non-Renewal of Registration’ of vehicles.
  2. A Private vehicle failing to get a renewal of its registration certificate may be declared as ‘End of Life Vehicle’.

3. De-registration and scrapping of Government and PSU vehicles in vehicle scrappage policy in India:

  1. All vehicles of the Central Government, State Government may be de-registered and scrapped after 15 years from the date of registration.
  2. All vehicles of the Municipal Corporation, Panchayats, State Transport Undertakings may be de-registered and scrapped after 15 years from the date of registration.
  3. All vehicles of the Public Sector Undertakings and autonomous bodies with the Union and State Governments may be de-registered and scrapped after 15 years from the date of registration.

4. Incentives offered to owners of old vehicles for scrapping old and unfit vehicles:

  1. Scrap Value amount for the old vehicle given by the scrapping centre, which is approximately 4-6 % of ex-showroom price of a new vehicle.
  2. All the vehicle manufacturers are also advised for providing a discount of 5% on purchase of new vehicle against submission of “Certificate of vehicle scrapping” given by RVSF.
  3. The concession in the motor vehicle tax shall be of up to 25%, in case of non-transport vehicles against submission of “Certificate of vehicle scrapping” given by RVSF. This concession will be available up to 15 years from the date of first registration.
  4. The concession in the motor vehicle tax shall be of up to 15%, in case of transport vehicles against submission of “Certificate of vehicle scrapping” given by RVSF. This concession will be available up to 8 years from the date of first registration.
  5. The registration fees may also be waived for purchase of new vehicle against the scrapping certificate given by the scrapping centre RVSF.

Where to go to scrap the old, unfit or defective vehicles?

  1. Registered Vehicle Scrapping Facility (RVSF) and Integrated Scrapping Facilities will be set up across India for scrapping purposes of the old, unfit or defective vehicles.
  2. The owners of old vehicles will go to any of these registered scrapping centers to scrap old and unfit vehicles.
  3. Any person can go to any Registered Vehicle Scrapping Facility (RVSF) across India.
  4. These centers will provide the owners with a ‘scrapping certificate’ which will be used to get the various kinds of incentive while purchasing new vehicle.

1. Registered Vehicle Scrapping Facility (RVSF) across India:

The Ministry of Road Transport and Highways will promote setting up of Registered Vehicle Scrapping Facility (RVSF) across India. The Govt. will encourage public and private participation for opening up of such Scrapping centres.

2. Integrated Scrapping Facilities for old vehicles across India:

It is being planned to develop a highly specialized centre for scrapping the old vehicles among many other potential centres, where different scrapping technologies can be synergized together. One such facility is identified in Alang in Gujarat among many such centres.

Criteria for opening Registered Vehicle Scrapping Facility (RVSF) across India:

How to open one Registered Vehicle Scrapping Facility (RVSF), if anyone wants to?

  1. There will be a simplified registration process through single window to apply for Vehicle Scrapping center.
  2. The scrapping facility center will have to comply with environmental and pollution norms and with all applicable acts of law to avail Vehicle Scrapping center.
  3. The scrapping centres must have adequate parking facility to accommodate the old vehicles.
  4. The scrapping centres must have de-pollution equipments for air, water and sound pollution to minimize the environment pollution.
  5. The scrapping centres must have adequate facilities for hazardous waste management and disposal.

Where to get Fitness certificate of tests and test report of a vehicle?

To get the fitness test, fitness certificate and test reports of a vehicle, Automated Fitness Centres across India to be promoted on PPP models.

‘Automated Fitness Centres’ for testing of vehicles and providing Fitness certificate:

  1. The Ministry shall promote the setting up of many Automated Fitness Centres across India on a PPP (Public-Private Partnership) model by state government, private sector, automobile companies etc.
  2. To avoid conflict of interest, operators of Automated Fitness Centres shall only provide testing facility and shall not provide repair or sale of spare services.
  3. These Automated Fitness Centres should have adequate space for test-lane, IT servers, parking and free movement of vehicles.

How to get appointment for Fitness certificate of old vehicle at Automated Fitness Centres?:

  1. Appointment for fitness centres to get Fitness certificate may be booked online.
  2. Fitness certificate and Test reports shall also be generated online.

Proposed Scrapping Policy timeline (Tentative):

  1. Rules for Fitness Tests and Scrapping Centres: 1st October 2021
  2. Scrapping of Government and PSU vehicles above 15 years of age: 1st April 2022
  3. Mandatory Fitness Testing for Heavy Commercial Vehicles: 1st April 2023
  4. Mandatory Fitness Testing (Phased manner) for other categories: 1st June 2024

So, it’s a long road ahead, but better late than never. This Vehicle Scrapping policy will certainly boost the environment around us. The expenditure on fuels saved may be used for social welfare schemes. While on one hand the new vehicle sales will give a boost to automobile sector, on the other hand replacing old vehicles with new one will provide safety and enjoyment to the buyers.

It’s a win-win situation all the stakeholders be it manufacturers, sellers, drivers, pedestrians and nation in broad way. It will bring investment and generate employments too. So, we as a nation must embrace this policy and Govt. should also act as a pro to make the whole process smooth.

Disclaimer: Kindly verify from official website of MoRTH in case of any confusion.

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