Vehicle Scrapping Policy Approved by Central Scrap 15 Years Old Vehicles by end of 2018

Published Date - 28 February 2018 03:24:59 Updated Date - 28 February 2018 03:26:30

All vehicles that are more than 15 years old will be impounded and sent to scrap dealers for dismantling, according to newly drafted Delhi government rules.

The government is finalising a policy to scrap commercial vehicle  that are more than 15 years old, and is proposing tax incentives from both the Centre and the states. This proposal, however, requires the approval of the Goods and Services Tax (GST) Council.The policy, likely to be called the Voluntary Vehicle Fleet Modernisation Programme, is expected to push 28 million vehicles off the roads.For this, a three-layer incentive system is being worked out. Old vehicles will have a scrap value that will accrue to the owner. The Union and state governments will also give incentives, including a tax benefit.

This new finalized V-VMP Policy aims to curb rising vehicular pollution in the country. Accordingly, new scrappage policy india 2018 will give a boost to vehicle scrap business and thus making it an automobile industry hub. Moreover scrapping of vehicles will lower the prices as old vehicle scrap can be used in production of autoparts among other things.

V-VMP policy will help in creating an ecosystem for voluntary scrapping of vehicles and replacement of old polluting vehicles or otherwise banning of old vehicles. This PM Yojan will promote vehicle scrap business making the country automobile Industry hub.

The rules, which are yet to get the government’s final approval, have been framed to implement a 2014 National Green Tribunal order which said that vehicles older than 15-years should neither be allowed to ply on the roads nor allowed to be parked in public spaces.

Here are five things should know about the newly drafted rules:

What does the rule say about such vehicles?

Under the ‘Delhi Scrapping of Vehicles Rules, 2018’ all impounding vehicles, including two-wheelers, will be sent to empanelled scrap dealers for dismantling. Owners will be paid a scrapping charge by the dealer but it has not been defined yet.

What you need to do if you own such a vehicle?

Old cars and two-wheelers can be voluntarily given to empanelled dealers. The process will be made online with vehicle owners having the option to choose a dealer using a mobile application. The portal will also be available on transport department’s website.

Which are the enforcing agencies that will be involved in the process?

The enforcing agencies responsible for implementing the rules are traffic police, municipal corporations and transport department.

What happens if a vehicle owner does not comply with the rules?

Junk vehicles parked in public spaces will be impounded and a communication will be sent to the owner, who will have to submit an undertaking for scrapping within 15 days. If the owner does not come forward then vehicle will be impounded and the value will be credited to government’s account.

When will these rules be enforced?

The rule, that is likely to impact 37 lakh vehicles out of the over one crore registered vehicles, will be implemented by the year end.


Vehicle Scrapping Policy to Scrap 15 Years Old Vehicles – Details

The important features and highlights of new scrappage policy india 2018 are as follows:-

  • Finance Ministry has approved new policy for scrapping of vehicles which are 15 years old or more and thus banning of old commercial vehicles.
  • Voluntary Vehicle Fleet Modernisation Programme (V-VMP) Policy will now be presented in GST Council to decide the amount of concession that Government of India (GoI) and the state govt. will offer.
  • Accordingly, govt. will implement this policy to promote old vehicle scrap business and make the entire country an automobile industry hub.
  • The prices of automobile parts will become cheaper. Moreover, companies could use old scrap for production of auto-parts among other things which will also promote vehicle scrap business.
  • Subsequently, the primary objective is to create an ecosystem to voluntary scrap and banning of old cars, trucks and other commercial vehicles.
  • This decision will result in an additional Rs. 10,000 crore tax revenue as automobile sector will benefit from it.

This new draft of V-VMP policy will cover all cars, trucks and other commercial vehicles bought on or before 31 March 2005. The total number of old vehicles under scrapping policy is about 28 million or 2.8 crore. However in the first phase, this policy will include only commercial vehicles on a voluntary basis which will get extended to include private four wheelers later. V-VMP Policy in next phase will scrap total 60 million vehicles off road.

Vehicle Scrapping Policy – Impact on Pollution

This new policy for scrapping of vehicles will reduce pollution to a great extent. As per the reports, around 65% of the vehicular pollution is caused by those heavy vehicles which are 15 years or older. This is a major initiative towards scrap old cars and heavy vehicles in India.

As per the reports, one 15 year old vehicle has emissions equivalent to 25 new generation vehicles. Moreover, the auto-grade metal in India costs around Rs. 6000 per tonne. However, the original value of auto grade metal is around Rs. 12,000 – 13,000 per tonne. So, PMO is keen on implementing this scrappage india policy 2018 as soon as possible.

V-VMP policy will straight-away take off 28 million decade old vehicles / four-wheelers off road. As per the earlier draft proposal, govt. has decided to provide relief of Rs. 5 lakh on purchase of new commercial vehicle. However, this new vehicle must cost around Rs. 15 lakh. In addition to this, people will have to surrender their over 15-year old commercial vehicles.

Furthermore to achieve 22% annual growth rate of automobile industry, govt. needs to construct an additional highway lane every 3rd year. The cost of construction of 3rd lane will cost around Rs. 80,000 crore to the govt.


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