Car Scrapping Policy in India

By: Aarti Surkule

New Vehicle Scrapping Policy:

When a car has come to such a point that it can no longer be repaired one may think of sending a car to the scrapyard and getting some money out of it. There are certain policies for vehicle scrapping to reduce the adverse impact of such old vehicles on the environment by recycling the old cars. 

On 13^th August 2021, a policy was introduced in India for replacing old vehicles running on Indian roads with new and modern vehicles. This policy is “the Vehicle Scrappage Policy”. It was expected that this policy would contribute to reducing pollution created by old vehicles.

For instance, such policies may help to control the smoke released and noise generated by some old vehicles, causing air pollution and noise pollution respectively. Furthermore, vehicles with maximum facilities would be in great demand. As a result, it would create job opportunities for various middle-class families for advertising or selling them.

There are various countries like the United States, Canada, China, Germany that have introduced such Vehicle Scrapping Policies for curtailing vehicular pollution and for boosting their automotive industries.  Various automakers are launching scrappage centres.

For instance, Mahindra MSTC (Metal Scrap Trade Corporation Limited) Recycling is providing vehicle scrappage solutions under the brand CERO (Cooperative Energy Recycling and Organics). Furthermore, Maruti Suzuki Toyotsu was launched by Maruti Suzuki and Toyota in 2019. 

The Vehicle Scrappage Policy creates a space for a cleaner fleet of vehicles. Hence, the policy also provides support Green India Mission (GIM)of India. Besides pollution control, the policy also helps in improving road safety factors.

According to Mr Nitin Gadkari, Minister of Road Transport and Highways of India, steel, rubber, plastic, copper, aluminium are some of the raw materials which can be obtained from the scrapping of vehicles. As a result, it would help in reducing the price of new vehicles, hence, would contribute to boosting sales of vehicles.

Conditions and rules for car scrapping:

There are certain rules for sending the car for scrapping. They are –

1. If the registration certificate of the car is expired
2. If the car was damaged in a natural calamity or an accident in such a way that is cannot be repaired
3. If the car fail the fitness test at the registered inspection centers
4. If the car is seized and taken into legal custody due to any infringement of law or regulation.
5. If the government vehicle is withdrawn from its service and is no longer in use.

New rules of the National Capital Region (NCR):

According to the recent report, the Delhi government had issued an order in the NCR which says that diesel cars that are older than 10 years and used petrol cars of more than 15 years should be scrapped in the scrapyard.

When the expiration date of the registration certificate of the car is about to come then one have to give it to a registered automated vehicle inspection centre whether one wants to dispose of it or keep it is one’s choice. The government plans had set up about 75 inspection centres during the first phase of implementation of the scrapping policy.

Among this 26 centres are opened up. Further, 450 to 500 inspection centres were developed countrywide. All these centres should be connected with the VAHAN database. Vahan is where all the data of vehicles that are registered in the country are stored.

Furthermore, the car can also be scrapped at government-registered recycling centres. For instance, Maruti Suzuki and CERO MSTC and Toyota Tsusho’ facility are present in Noida. In Gujarat, India Tata is bringing the scrapping facility.

How will be the testing done?

The process of testing a vehicle is nothing but checking the safety and emissions testing. There should be a detailed checking of the safety equipment which are necessary for every car. For example, seatbelts or airbags. As per BS4 (Bharat Stage IV) or BS6 (Bharat Stage VI ) -based standards a pollution test should be done.

BS4 and BS6 both are the maximum emission norms that are used to set the maximum pollution that comes from any motor vehicle. According to the BS4 emission norms, a vehicle cannot emit more than 80mg/km of NO2 (nitrogen oxides). According to the BS6 emission norms, the pollution limit has been reduced to 60mg/km.

Some other important tests are checking the working and efficiency of headlights, and brakes. Checking rust and structural damage of the engine on a vehicle is also necessary.

Benefits of Old Vehicle’s Scrapping:

Some aspects motivate one to scrap old vehicles and then purchase new vehicles. Then are—

1. No registration fee on purchasing new car.
2. Can get 5% discount on buying new vehicle
3. 25% of money can be given back on road tax for personal vehicles. Up to 15% rebate can be given for commercial vehicles.
4. 4% to 6% of the scrap value can be received by the owners for new vehicles.

The Ministry of Road Transport and Highways (MORTH) of India stated that in India 2.1 crore vehicles are older than 20 yrs. In Karnataka, the number is about 39.4 lakh. Delhi is observed to be 36.1 lakh. In Uttar Pradesh, it is 26.2 lakh. Kerala has 20.6 lakh. Tamil Nadu is with 15.9 lakh. Punjab has 15.3 lakh vehicles that are older than 20 years. 

The Ministry of Road Transport and Highways (MoRTH) was founded in July 1942. It is a ministry of the Government of India. The main aim of this body is to administer and formulate the laws, rules and regulations which are related to Road Transport. Also, it aims to increase the efficiency of the road transport system in India.

The Vehicle Scrappage Policy will help in the achieving following things :

1. The policy will help in boosting the Indian automobile industry to about 30%. It will boost from Rs. 4.5 Lakh i.e, US$ 61.46 billion which is the current value, to Rs. 10 Lakh i.e, US$ 136.59 billion over upcoming years.
2. It would also contribute in reducing the crude import bill of India which is Rs. 10 Lakh Crore or US$ 136.59 billion.
3. India’s current export gain is Rs. 1.45 lakh crore or US$ 19.81 billion. With this policy it would increase till Rs. 3 lakh crore or US$ 40.98 billion. 
4. The policy would also attract new investments of about Rs. 10,000 crore or US$ 1.37 billion. Additionally, it would also create jobs.

Opinion of Auto and Taxi Drivers:

The new Vehicle Scrapping Policy had put the auto and taxi unions in trouble. According to this new policy, any commercial vehicle that is older than 15 years should be scrapped. Additionally, any private vehicle older than 20 years will also be scrapped if that vehicle fails the fitness and emission test. This decision is not accepted by the auto and taxi unions.

As the unions were adversely affected by the pandemic, they are demanding the government to increase the last 2 years i.e, 17 years for commercial vehicles and 22 years for private vehicles. They are requesting this because of the Covid-19 situation which started affecting the jobs of this driver from March 2020 during the lockdown period. Due to this, various drivers had lost their jobs. With no choice left, some returned to their hometown.

Urge of Unions:

A.L.Quadros is a senior taxi union leader. He said that the Government should tell the banks that the amount of EMI (Equated Monthly Instalment) should be reduced because the earnings, income of the drivers have decreased due to the pandemic. Rather some of them were even not getting sufficient food to eat.

A letter was sent to the Chief Minister of Maharashtra by the Mumbai Taximen's union. Through the letter, they were demanding Rs 1,500 to every driver as a reimbursement or repayment for the loss. Also, the taxi unions asked for a subsidy in electric vehicles which are proposed in the future.

Similarly, the Auto Unions were also urging that the Vehicle Scrappage Policy would affect them adversely. According to the leader of the Auto Union, Shashank Sharad Rao, due to the pandemic situation, many of the drivers have lost their jobs.

Due to this, it would be incorrect for expecting the auto permit holders to dispose of their vehicles only because it is 15 years old. Hence, the extension of 2 years should be given by the officials.

Conclusion:

For achieving the circular economy of waste to wealth, the Vehicle Scrappage Policy can be proved significant. The principles of 3Rs i.e., Reuse, Recycle and Recover would boost the Auto sectors and Metal sectors of India.

Along with the development of all sectors, the conditions and demands of middle-class families should also be concerned. It would lead to the overall growth and development of the nation.

Reference:

1. https://www.ibef.org/blogs/vehicle-scrappage-policy
2. https://www.cardekho.com/india-car-news/car-scrappage-policy-all-your-questions-answered-27652.htm
3. https://www.autocarindia.com/car-news/mahindra-cero-vehicle-scrappage-service-introduced-in-india-420439
4. https://www.freepressjournal.in/mumbai/mumbai-auto-taxi-unions-unhappy-with-new-vehicle-scrappage-policy