Finance Minister Nirmala Sitharaman on Monday, February 1, announced a voluntary vehicle scrappage policy to phase out old vehicles. The much-awaited policy is aimed at phasing out old and polluting vehicles.
Presenting her third budget in Parliament, FM Sitharaman stated that under the voluntary vehicle scrapping policy, personal vehicles would undergo a fitness test after 20 years, whereas commercial vehicles would need to take it after completing 15 years.
The finance minister further added that this will promote fuel-efficient as well as environment friendly vehicles while helping the government slash India's massive import bills. Union Road Transport Minister Nitin Gadkari had earlier said that a policy to scrap over 15-year-old vehicles owned by government departments and PSUs is likely to be notified soon and will be implemented from April 1, 2022.
The policy is already approved by the government.
"The minister... approved the policy of deregistration and scrapping of vehicles owned by government department and PSU, which are above 15 years in age," the Ministry of Road Transport and Highways had said in a statement.
"It is to be notified, and will come into effect from 1st April, 2022," the statement said.
On July 26, 2019, the government had proposed amendments to motor vehicle norms to allow scrapping of vehicles older than 15 years in a bid to spur adoption of electric vehicles.
"We have submitted the proposal and I am expecting that we will get approval as soon as possible for the scrapping policy," Gadkari had said on January 15.
The minister had also said that once the policy is approved, India will become an automobile hub and there will also be a reduction in the prices of automobiles.
He said recycled material from old vehicles will help reduce prices, adding that the automobile industry's turnover, which is Rs 4.5 lakh crore with Rs 1.45 lakh crore exports, will get a boost.
Earlier, Finance Minister Nirmala Sitharaman had said that a policy for scrapping of old vehicles "is in the works" and will be announced after ministries concerned "fine tune" it.
In May 2016, the government floated a draft Voluntary Vehicle Fleet Modernisation Programme (V-VMP) that proposed to take 28 million decade-old vehicles off the road.
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