National Automobile Scrappage Policy: Here’s how India’s automobile industry will be reshaped

New Delhi: Prime Minister Narendra Modi on Friday (August 13) announced the launch of the National Automobile Scrappage Policy. Speaking on the sidelines of the Investor Summit - Gujarat, PM Modi called the newly launched scheme a “significant step towards Aatmabirbhar Bharat.” 

 “The scrappage policy will provide a new identity to the country's auto sector. It will play a huge role in removing unfit vehicles from roads, and bring a positive change in all sectors and not just the auto sector,” the Prime Minister said. Notably, the National Automobile Scrappage Policy was first announced by Finance Minister Nirmala Sitharaman in her 2021 Budget speech. 

Key things to know about the National Automobile Scrappage Policy: 

1. Fitness tests for private and commercial vehicles 

The National Automobile Scrappage Policy has made it mandatory for all private and commercial vehicles to undergo ‘fitness tests’ as soon as they age 20 years and 15 years, respectively. 

2. What happens if the vehicle doesn’t undergo a fitness test? 

If a vehicle that is required to undergo a fitness test skips it then the registration of the four-wheeler will be cancelled automatically. 

3. Where fitness tests will be conducted? 

Government-certified fitness centres have been given the responsibility to conduct the fitness tests of the vehicles. Owners will also be able to generate fitness reports online. 

4. What happens after car scrapping? 

Once an owner scraps his/her car, he/she is provided with a scrapping certificate. Using the scrapping certificate, one can get a discount of about 5-6% on the purchase of a new vehicle.

5. Tax benefits with car scraping 

Customers possessing a scrapping certificate can also avail a road tax rebate of up to 25% on the purchase of new personal vehicles. 

6. Tax benefits on purchase of commercial vehicles

Owners can also avail a 15% tax rebate on the purchase of commercial vehicles under the new National Automobile Scrappage Policy. 

6. Mandatory scrapping of government vehicles 

Under the National Automobile Scrappage Policy, the Centre has made it mandatory to scrap all state-owned four-wheeler vehicles older than 15 years. 

7. Registration fees wavier 

Customers with the scrapping certificate could also receive a waiver on registration fees on the purchase of new vehicles. 

8. Creation of an eco-system for phasing out unfit and polluting vehicles

The National Vehicle Scrapping Policy is expected to create an eco-system for scrapping unfit, polluting vehicles from the country in an environmentally friendly and safe manner. 

9. National Automobile Scrappage Policy to bring investments 

Road Transport and Highways Minister Nitin Gadkari had earlier announced that the National Automobile Scrappage Policy is expected to bring investments worth over INR 10,000 crore. Also Read: 2021 Royal Enfield Classic 350 launch date out: Check bike’s specs, features and price before booking

10. 50,000 jobs will be created 

In March, Gadkari has said that the policy will help India in creating more than 50,000 jobs in the country, with the massive flow of investments in India. Also Read: Unbelievable! Indian Rupee was used in Pakistan post Independence for one year

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