The much-awaited Vehicle Scrappage Policy is likely to get a nod and approval from the Indian Government which is going to be a piece of good news for the automotive industry. Nitin Gadkari, Union Minister of Road Transport & Highways delivered the good news in a recent interview where he indicated his intentions at the Atmanirbhar Bharat Innovation Challenge 2020-21 Event.
In an effort to reduce pollution levels and encourage the adoption of electric vehicles, the government has promoted recent updates to the existing motor vehicle norms to allow scrapping of vehicles older than 15 years. As per the reports, the Union Minister has submitted his proposal in order to get the approval as early as possible.
However, a final call for the decision will be taken up by the Prime Minister after the final rounds of consultation. As per the estimates of the Indian government, there are over 28 million vehicles older than March 31, 2005, across all categories, that are ready to be discarded by April 2020. Due to this situation, the automotive industry has been suffering a slowdown in sales since the past two years (recent data collected between April-December 2020).
The Vehicle Scrappage Policy will get rid of old, polluting vehicles from the road. Adopted by a number of developed markets, a Vehicle Scrappage Policy is usually mandated by the government to accelerate the replacement of old, polluting vehicles by new vehicles.
To reduce the burden of old vehicles, the Indian government has been urging for Vehicle Scrappage Policy for a long time. As per one of the reports, the heavy and medium commercial vehicles segment faces a loss of 54% year by year, and if this policy is implemented, the sector will benefit from it.
According to the reports from the Centre for Science and Environment (CSE), by 2025, India will face a monumental load of over 2 crore old vehicles nearing the end of their lives along with the other unfit vehicles, which can cause huge pollution and environmental damage.
The Delhi government, in its Electric Vehicle Policy, has already implemented scrappage incentives with electric vehicles for 25% electrification by 2024. A similar implementation of the policy is needed at the national level too. For the national-level implementation, additional criteria for identifying grossly polluting and unfit vehicles based on fitness and roadworthiness, damaged vehicles, emissions performance, are needed to guide the nation-wide program.
Update Source: Autocar India