A vehicle scrappage policy has been announced by the Indian Finance Minister; Nirmala Sitharaman. Now the privately-owned vehicles will have to go under a fitness test after the 20 years of registration. The same will be applicable for commercial vehicles in 15 years. This is likely to be implemented from 1st April 2022. The decision has been taken on the behalf of reducing oil import bills and pollution which is high because of the old and unfit vehicles.

Budget 2021

Nirmala announced that a new vehicle scrappage policy will revolutionize the current scenario as the new rules will ensure that the private vehicles undergo the fitness test in 20 years from the registration and the commercial vehicles go through it in 15 years. She also announced that the policies will be executed from April month and further details will be announced by the Ministry of Road, Transport, Highways. The ministry has come up with the idea of providing concessions on the taxes being charged at the time of replacement/exchange sale/purchase of old vehicles. Though the policies are pre-existed, the new commencements will ensure that more and more vehicles are replaced with new ones. This is also important for the vehicle producing companies as their stock production and sales have diminished after the pandemic. It means, it will surely benefit the automobiles sectors of India.

There had been an announcement in this relation earlier too in which, Union Road Transport Minister Nitin Gadkari had notified about the policy of scrapping those government-owned vehicles which are more than 15 years old. This had to be implemented from the April month of 2022. Now the policy has been already granted permission by the government.

This vehicle scrappage policy will indirectly help in reducing pollution because the old generation vehicles produce so much polluted air and they also consume high-level fuel. The replacement of these vehicles will become easier with the new policies which means the production and consumption of vehicles will once again gain speed which means there will be long-term economic growth impacts. Replacement of the commercial vehicles will become easier so that there will be more opportunities for fuel-saving in daily route vehicles. The best of this policy is that most of the oldest public vehicles that cause so many problems to passengers will now be replaced and there will come new services. It is to be seen now that how long these steps influence the economy of India.


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