Get money for your clunkers: India unveils vehicle scrappage policy

Written By: Sumit Chaturvedi WION Web Team
NEW DELHI Published: Mar 18, 2021, 06:32 PM(IST)

File photo Photograph:( AFP )

Story highlights

The scheme is somewhat like the 'cash for clunkers' scheme introduced by various European countries in the aftermath of 2008-09 global financial crisis. 

The vehicle scrappage policy is finally seeing the light of the day in India, after many deliberations and delays. 

Customers will get a discount and other benefits on buying new vehicles once they produce the certificate that their old vehicle has been scrapped and disposed of. 

The scheme is somewhat like the 'cash for clunkers' scheme introduced by various European countries in the aftermath of the 2008-09 global financial crisis. 

Vehicle manufacturers may offer a 4-6% discount against the scrappage certificate presented by the buyer. 

Other rebates include a road tax relief of up to 25 per cent for a personal vehicle and 15 per cent for commercial vehicles. 

Waiver of registration fees for the purchased vehicle is also one of the options. 

The buyer will obtain a certificate after giving their old, dilapidated vehicles for scrappage at centres mandated by the government and a discount can be availed on the new vehicle on presenting this certificate. 

The new policy requires all personal vehicles to undergo a fitness test after 20 years, while commercial vehicles would require it after the completion of 15 years. 

While vehicle scrappage policy helps customers to dispose off their old vehicles while getting discounts in return, it also helps automobile companies and the economy as the vehicle sales increase. 

The policy also helps in combating vehicular pollution in cities as it reduces the population of old and defective vehicles. 

Estimates say old vehicles pollute 10-12 times more compared to vehicles that are fit. The road safety will also improve as at many times the old vehicles break down in the middle of the road creating a safety hazard. 

According to official statistics, there are around 51 lakh vehicles in India which are older than 20 years, 34 lakh vehicles are more than 15 years old and around 17 lakh vehicles, older than 15 years, but they do not possess vehicle fitness certificate.  

Rules for fitness tests and scrapping centres will come into effect from October 1, 2021. 

The scrapping of government and PSU vehicles above 15 years will be undertaken from April 1, 2022.

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