‘Owners Can Trade, Transfer Scrapping Certificates Or Even Use It To Get Discount On New Vehicles’: Road Ministry

The Ministry of Road Transport and Highways’ (MoRTH) new vehicle scrapping policy will permit owners of old vehicles to receive certificates that can be used to avail a discount or a waiver in the registration charges whilst purchasing a new car. Additionally, the owners will be allowed to trade or transfer their certificates to someone else if they do not wish to buy a new vehicle.

This new scheme, which is to be notified soon, aims at incentivizing old vehicle owners to explore the newer alternatives in the market in place of their outdated and high pollution-causing automobiles.

Accordingly, commercial and personal vehicles older than 15 and 20 years respectively will be mandatorily required to queue up for testing and for scrapping subsequently. Personal vehicles younger than 20 years can be voluntarily tested and they will have to be scrapped if they fail the assessment two consecutive times.

MoRTH secretary Giridhar Aramane told the Indian Express, “We will make the scrappage certificate tradable. Suppose you are scrapping your vehicle, you can sell the certificate and somebody else can claim it. We have consulted the industry and have incorporated their suggestions also. Some benefits in terms of discount, road tax…registration charges we will waive off for people who scrap their cars.”

The central government has already sanctioned 26 automated fitness testing centres as a model for states to replicate in order to speed up this process.

The MoRTH has advised the states to adopt a public-private partnership (PPP) system to establish more fitness centres and even provide free land for the same. Private companies will be allowed to indulge in this sector too, though their audits will be done by the authorities.

In fact, the central government is content with an open participation of companies, including the car-makers themselves along with the steel industry and others in the entire scrapping business. The only condition is that they will have to abide by the labour and environmental laws.

Moreover, a green tax is also set to be introduced that will shoot up the registration charges for older vehicles even if they pass the mandated fitness tests. The government is also undertaking responsibility to move aged automobiles out of the system.

On Friday, it released a draft notification mentioning that the registration of motor vehicles older than 15 years that are owned by the central, state and union territory governments, local government institutions, autonomous bodies, public sector undertakings and state transport undertakings will not be renewed from 1st April, 2022 onward.

The new scrapping policy is slated to create 35,000 more jobs and will shoot up the valuation of the auto manufacturing industry by around 33 per cent to almost Rs 6 lakh crore from the current Rs 4.5 lakh crore.