The Government has launched the Vehicle Scrappage Policy 2021 in India.

What is it, when will it come into force, what are its benefits, what are its disadvantages, should you worry?

We will cover all these questions in this article. So keep reading till the end.

Let’s start with the main question.

What is Vehicle Scrappage Policy 2021?

Vehicle Scrappage Policy is a policy formulated to get rid of the unfit, old and polluting vehicles in the country through a systematic environment friendly infrastructure.

And it is a voluntary scheme.

Under this policy, the government will build registered Vehicle Fitness Test Centres and registered Scrapping Facilities across the country.

We will talk about the benefits provided by this policy to vehicle owners later in this article. 

But this policy will also be beneficial for investors looking to invest.

The Government has urged the youth and startups of the country to invest in these facilities through PPP(Public Private Partnership).

So if you are looking to invest somewhere, this can be a good option.

Now that we know what it is, let’s move to the next most important question.

When will the Vehicle Scrappage Policy 2021 be Implemented?

Vehicle Scrappage Policy will come into force from April 1, 2023 for Heavy Commercial Vehicles.

And for other vehicle categories it will come into force from June 1, 2024.

All the commercial vehicles which have completed or will complete 15 years before April 1, 2023, will fall under the vehicle scrappage policy.

And all the passenger vehicles which have completed or will complete 20 years before June 1, 2024, will fall under the vehicle scrappage policy.

New commercial vehicles will fall under the policy when they will complete 10 years of age i.e. when their registration period gets over.

And new passenger vehicles will fall under the policy when they will complete 15 years of  age i.e. when their registration period gets over.

What will be done under Vehicle Scrappage Policy 2021?

Once the registration period of your vehicle gets over, the Vehicle Fitness Test of your vehicle will be carried out in the registered Vehicle Fitness Test Centre.

This test will include multiple tests like engine performance test, brake test, safety equipment test, pollution test etc.

Once your vehicle passes the fitness test, you will be able to re register your vehicle.

What if your vehicle fails in the fitness test?

If your vehicle fails the fitness test then you will be given one more chance to get your vehicle repaired and take the test again.

If your vehicle passes in the retest then you can re register your vehicle.

But if your vehicle fails the retest again, then your vehicle will not be registered again.

In this case you can either keep your vehicle but can not drive it.

Or you can get it scrapped from the registered scrapping facility.

Benefits of Vehicle Scrappage Policy 2021 for the Vehicle Owner

Benefit 1: You will get the Scrap Value of your vehicle. This will be around 4-6% of the ex-showroom price of the new vehicle.

Benefit 2: No registration fee for purchase of new vehicle if the Scrap Certificate of old vehicle is shown.

Benefit 3: Concession in Motor Vehicle tax of up to 25% for passenger vehicles and up to 15% for commercial vehicles.

Benefit 4: Vehicle manufacturers may provide you a discount of up to 5% if the Scrap Certificate of old vehicle is shown.

Benefits of Vehicle Scrappage Policy for the Vehicle Manufacturer

Scrapping and recycling the old vehicles will reduce the raw material cost for the manufacturing companies.

According to the reports, the raw materials cost will come down by as much as 40%.

Hence the prices of the vehicles will come down and therefore the sale of the vehicle will increase and it will bring more revenues and profits to the companies.

Benefits of Vehicle Scrappage Policy for the Government

Lower prices of vehicles means more sales and hence more tax revenue for the government.

Benefits of Vehicle Scrappage Policy for Everyone Else

Cleaner environment.

Lower prices of new vehicles.

If you maintain your vehicle well, then it will also bring down the maintenance cost.

If you still have some doubts or questions or have a valuable suggestion for us, please feel free to comment below.

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