Vehicle Scrappage: Under the Vehicle Scrappage Policy, India will give tax exemption to the people who will take part in the recycling program of their old vehicles, which aims to remove millions of polluting trucks, cars and buses from the roads. Road Transport and Highways Minister Nitin Gadkari said in Parliament on Thursday that 25% will be waived in road-tax for new cars for personal use and 15% for commercial use. The country’s so-called cash-for-clerks scheme was mentioned in the budget of 1 February, but the details were not given at that time.
Automakers are also being requested that if a person scraps his old car, then he will be given a discount of 5% on the new cars. Other incentives include waiving the registration fee for new vehicles and setting a scrap price for old cars that is at least 4% of the price of a recent model.
The auto sector will be restored rapidly
India’s carmakers are relying on a plan to boost sales, which has broken due to a widespread drop in demand amid an epidemic-induced recession. Mahindra & Mahindra Limited, India’s largest SUV manufacturer, reported its first quarterly loss in nearly two decades last year and Maruti Suzuki India Ltd. reported its first loss in the three months ended June 30.
Will help to reduce pollution
The vehicle scrap policy will also improve the environment. According to World Bank calculations, India has the world’s worst air quality and toxic smoke equals 8.5% of the country’s GDP.
Vehicle fitness test required
The push to remove old cars from the roads will also mean that autos that are more than 20 years old and commercial vehicles older than 15 years will have to undergo fitness tests. If the fitness certification is not kept current, then those vehicles will be disabled. It will also cost more to obtain a fitness certificate for cars older than 15 years, as well as vehicles used by various government agencies will be automatically de-registered after 15 years. These automated fitness tests are being prepared on the basis of the Public-Private Partnership (PPP) model. Under this, the central government will work closely with states and private players.
India is facing problems due to old cars. Data show that 5.1 million light motor vehicles are more than 20 years old and 3.4 million light motor vehicles are more than 15 years old. About 1.7 million medium and heavy commercial vehicles are over 15 years old and do not even have a valid fitness certificate.
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