PM Modi launches National Automobile Scrappage Policy: All you need to know

The policy calls for private and commercial vehicles, that are more than 20 and 15 years old, respectively, to undergo ‘fitness tests.’

Prime Minister Narendra Modi on Friday launched the long-awaited National Automobile Scrappage Policy, describing it as a “significant step towards Aatmabirbhar Bharat.” The policy, which PM Modi launched while virtually addressing the Investor Summit in Gujarat, was announced by Union finance minister Nirmala Sitharaman in her Budget speech in February.

Representative Image (HT)

Here’s all you need to know about the policy:

(1.) The policy recommends “fitness tests” for private and commercial vehicles that are more than 20 and 15 years old respectively. In the absence of a “fitness certificate,” registration of such vehicles will be automatically cancelled.

(2.) It further recommends mandatory scrapping of all government vehicles that are more than 15 years old but is applicable only on four-wheelers.

(3.) The fitness tests will be done at government-certified fitness centres, appointments for which can be made online. Test reports will be generated in online mode. Also, scrappage can be done anywhere in the country, regardless of the place of vehicle registration.

(4.) The scheme also proposes several incentives which the owners can avail after being given a scrapping certificate. This includes the scrap value for the old vehicle, which is expected to be around 5-6% of the price of a new vehicle.

(5.) Additionally, a road tax rebate of up to 25% for new personal vehicles, and 15% for new commercial vehicles, as well as a 5% discount against the scrapping certificate, have also been proposed under the policy.

(6.) The registration fees for the purchase of a new vehicle may also be waived upon getting the old vehicle scrapped.

(7.) The policy will bring investments worth more than ₹10,000 crore and create up to 50,000 jobs, Union transport minister Nitin Gadkari had said while announcing details of the policy, in March.