Budget 2021: Announcement of scraping policy for old vehicles, know its details 

Share this News:

New Delhi, February 1, 2021: Finance Minister Nirmala Sitharaman has announced a voluntary vehicle scrapping policy for old vehicles in the General Budget (Budget 2021) of FY 2022. Under this policy, personal vehicles will have to undergo a fitness test after 20 years. Whereas, commercial vehicles will have to undergo a fitness test after 15 years. The fitness test of the old trains will be in the automated centres. 

The Road Transport and Highways Ministry will announce the final details of this policy. The vehicle scrap policy is expected to create about Rs 43,000 crore of business opportunities. Also, this will increase consumption in the auto industry and it will also be beneficial for the environment. Auto stocks have gained momentum following the announcement of the scraping policy.

Reduce Pollution and Oil Import Bill: Sitharaman highlighted details of vehicle scrap policies in their Union Budget 2021 presentation. She said, ‘To remove old and unfit vehicles, we announce a separate voluntary vehicle scrapping policy. It will encourage fuel-efficient and environment-friendly vehicles. This will reduce vehicular pollution and the oil import bill.

Bharat: Road Transport and Highways Minister Nitin Gadkari had said that India could emerge as a major hub for automobile manufacturing after the approval of the Vehicle Scrap policy, like steel, aluminium from scraping could become a major hub for automobile manufacturing. Major raw materials such as plastics can be recycled. This may result in a 20-30 percent reduction in automobile prices. 

The Central Government had proposed an amendment in the Motor Vehicle Norms on 26 July 2019 to allow scrapping of vehicles older than 15 years. The objective is to increase the reach of electrical vehicles. Earlier, in May 2016, the government came out with a draft Voluntary Vehicle Fleet Modernization Program (V-VMP), which proposed to remove 2.8 crore old vehicles from the roads.