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Monday, October 18 2021

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“Voluntary Vehicle-Fleet Modernisation Programme”, Facts, fables

As per the report available in  Lok Sabha Secretariat  “Air pollution is one of the serious environmental concerns of the urban cities where the majority of the population is exposed to poor air quality“. The surge of urbanisation in India is causing a considerable increase in the number of vehicles. As the number of vehicles continues to increase and the consequent congestion increases, vehicles are now becoming the main cause of air pollution in cities. The Indian Government as well as the State Government have taken several measures for the improvement of the air quality in cities. These include the improvement in the quality of fuel, formulation of necessary legislation and enforcement of vehicle emission standards, improvement in traffic planning and management, etc.

Why new policy?

The rise in vehicular registration in the country year after year is quite alarming. As per the data published by the Ministry of Road Transport and Highways, Government of India as of August 31, 2021, the number of digitised vehicles is 29.22 crores. The following chart provides us a glimpse of the rise in vehicle registration in the Country.

If the above trend continues,  the vehicles on Indian roads are estimated to touch 50 crores by the year 2030. This will be an unmanageable situation in terms of air pollution as well as traffic-related problems. Keeping all these factors in consideration the Government of India has formulated a voluntary vehicle scrapping policy to phase out unfit vehicles. The move will help in encouraging fuel-efficient, environment-friendly vehicles, thereby reducing vehicular pollution and oil import cost.

What is the policy?

While launching the policy, Prime Minister Narendra Modi said it would help phase out unfit and polluting vehicles in an environment-friendly manner. “Our aim is to create a viable circular economy and bring value for all stakeholders while being environmentally responsible,”

As per the existing rules, Commercial Vehicles are required to undergo a fitness test every two years for the first eight years and annually thereafter. As for Private Vehicles, the registration is valid for 15 years, and further renewal of fitness certificate issued by the Road Transport Office (RTO)  valid for five years.

The new vehicle scrappage policy formulated by the Indian Government effective from April 1, 2023, mandates that all commercial vehicles older than 15 years and private vehicles older than 20 years would be scrapped if they fail the fitness test. It will be mandatory for Heavy Commercial Vehicles to undergo fitness testing via automated testing stations only. As for all the other classes of Commercial Vehicles and Passenger Vehicles, fitness testing via an automated testing station is proposed to be mandated in a phased manner from June 1, 2024. The fitness certificate will not be issued to vehicles that fail the test. However, one re-test will be allowed after the necessary repair/rectification and re-inspection will be required if ordered by the Appellate authority, failing which the vehicle will be identified as an end-of-life vehicle and will be eligible for scrapping.

If they pass the test they will have to undergo a similar fitness test every five years.

What are the benefits?

The policy includes a mix of incentives and disincentives. Vehicle owners whose vehicle is identified as unfit will get the following benefits and incentives:-

  1. Scrap value price equivalent to 4-6% of the ex-showroom price of a new vehicle.
  2. The scrapping certificate will have a 5% tradable discount while the purchase of a new vehicle.
  3. Zero fees for registration of the new vehicle.
  4. State governments will offer up to 25% road tax rebates for personal vehicles and up to 15% on commercial vehicles.

Rereduced maintenance cost and increased savings from fuel cost

However, the owners whose vehicle passes the fitness test are required to pay increased registration charges for the issue of fitness certificates by the authorities.

The draft guidelines issued by the Ministry under the new policy provide for the appointment of authorised scrappers for setting up, Registered  Vehicle Scrapping Facilities (RVSF). The RVSF is required to install and maintain necessary infrastructure facilities to become eligible. The Government will notify the list of RVSF while implementing the policy.

The “Voluntary Vehicle-Fleet Modernisation Programme”, seeks to usher in a new age of what it means to own and use an automobile in India said Union Minister Nitin Gadkari of Ministry of Road Transport & Highways (MORTH) while unveiling the policy in Parliament. According to Ministry, the policy will boost the Indian automobile industry increasing export component. The initiative will promote new technologies with better mileage of vehicles besides promoting green fuel and electricity and help in decreasing  India’s huge Rs. 10 lakh crore crude import bill.

As per the Reports published by the MORTH  there are over two crore vehicles older than  20 years and another two crore older than 15 years are plying on the road. Karnataka tops the list with more than 70 lakh such vehicles. The new policy facilitates the removal of old and polluting vehicles from the system and boosts the market for new fuel-efficient vehicles with a sustainable environment for all.

Image by carlovenson

Talekana Krishnadas Rai

The author holds a degree in MSW, LLB, is a practicing advocate & HR consultant with over 33 years of experience in the field of Human Resource Management

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