On March 18, 2021, Union Minister for road, transport and highways Nitin Gadkari announced a ‘voluntary’ vehicle scrappage policy to (i) mitigate vehicular pollution and (ii) more than double the turnover of Indian automobile industry from the present Rs 450,000 crore to Rs 1000,000 crore in a few years.
At present, there are 5100,000 vehicles which are older than 20 years, 3400,000 vehicles more than 15 years old but < 20 years and 1700,000 > 15 years, but without renewed fitness certificate. The policy architecture is founded on two pillars viz. incentivize their scrapping and dis-incentivize hanging on to them.
The owner going for scrap will get 4-6% of ex-showroom price of the new vehicle as compensation; 5% discount on purchase of the new vehicle; rebate on road tax @25% for personal vehicle (states levy this tax @4%, so 25% rebate is 1%). The policy also moots waiver of the registration fee for new vehicle purchased on production of ‘scrap certificate’ issued against scrapped vehicle. As for disincentives for hanging on, it proposes hike in fee for renewal of registration (Rs 5000/- for a car > 15 years up from Rs 600/-) and fitness certificate renewal fees, stiff penalties for delay in renewals and imposition of the so called ‘green tax’ by states on such vehicles.
All personal vehicles will have to undergo mandatory automated fitness test after 20 years to ply on the roads (for commercial vehicles, the threshold is 15 years). If, they don’t pass, those vehicles will be de-registered and impounded by the transport authorities, pronouncing it as ‘end of life vehicle’.
Even as the extant law in majority of the states provides for re-registration of say a private car (run on petrol) for 5 years on completion of initial registration period of 15 years, the policy leaves the choice to the owner of course, subject to the vehicle being fit to run (depending on the fitness, registration may be extended even beyond a total of 20 years). The incentives/disincentives are only intended to galvanize him/her take a decision that strikes a balance between his/her special needs and environmental concerns. The policy will kick off with notification of the rules (expected in October, 2021),
Meanwhile, an order of the Supreme Court (2018) validating a National Green Tribunal (NGT) order that barred petrol vehicles > 15 years from plying in the National Capital Region (NCR) (for diesel cars, the threshold is 10 years) has put a spanner in the works. It gives rise to four anomalies.
First, the order negates the extant law which provides for renewal of registration on completion of 15 years from the date of first registration and takes retrospective effect. For instance, a person who bought the car say, on January 1, 2007 on the basis that he would be able to run it for 20 years (15 plus 5) i.e. till January 1, 2027 – in sync with the law of the land – will now have to junk it on January 1, 2022.
Second, it presumes that all cars automatically become unfit for plying after completing 15 years. Whether a vehicle is fit to run or otherwise, a lot depends on how well it is maintained, its timely upkeep and maintenance; that needs to be tested instead of pronouncing it as unfit merely because it has reached a certain age.
Third, it leads to patent discrimination of vehicle owners in NCR vis-à-vis those in other states. While, the former have no other option but to dump their cars on completion of 15 years (even when these are fit to run and meet pollution norms), the latter can continue to run their cars up to 20 years and even beyond.
Four, the order renders the ‘voluntary’ vehicle scrappage policy infructuous in so far as NCR is concerned. When, there is prohibition on running the car beyond 15 years, the very mention of the word ‘voluntary’ is laughable.
The Government should take urgent steps to correct this anomalous situation. It may either approach the top court to relent; alternatively, bring about necessary amendment in the Motor Vehicles Act (MVA) to reflect the policy intent i.e. i.e. using fitness as the sole criterion irrespective of the vehicle’s age for determining whether it can be allowed to run.