More benefits on anvil for scrapping old cars

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Now you may get more benefits by scrapping old and polluting vehicles. To encourage vehicle owners as much as possible for scrapping, the government is reviewing the existing scrappage policy. Changes are being planned in this scheme. The Road Transport Ministry is mulling over additional benefits to promote scrapping of old and polluting vehicles.

According to sources, due to the poor response to the existing scrappage policy, the government has decided to change it. The Indian government may offer to promote scrapping on the lines of countries like America, Britain, China, Canada and Germany. The scrappage policy of 2021 had a proposal for incentives to be given by the manufacturers and state governments. The government had estimated that scrapping would attract investment of about Rs 10,000 crore and create 35,000 jobs, but this could not happen. Owners continued to sell old vehicles in rural areas instead of scrapping them.

Highlights of the current policy Under the scrappage policy of 2021, the scrap value of the old vehicle is 4-6% of the ex-showroom price of the new vehicle. After scrapping, the authorised center provides a scrapping certificate to the vehicle owners. The Roads Ministry had said that it would promote setting up of automated fitness centers for commercial vehicles on public-private partnership model. In recent years, many automakers have entered vehicle scrapping through mutual partnerships or their group companies, these include Tata Motors Rewire, Mahindra Sero and Maruti Suzuki.

The scrappage policy did not prove useful. The consumer response has been slow, with utilisation levels remaining below 20% at most of these centres. Experts say that due to limited financial benefits, vehicle owners are not showing interest in scrapping. Apart from this, lack of regular vehicle fitness testing is also a reason for low scrappage in India.