Prime Minister Narendra Modi launches automobile scrappage policy

NEW DELHI:  Prime Minister Narendra Modi on Friday formally launched the National Automobile Vehicle Scrappage Policy at the Investor Summit in Gujarat. The policy was first announced by Union Minister for Road Transport & Highways Nitin Gadkari in March 2021 to phase out older polluting vehicles.

While launching the policy, the PM said that it will bring in a fresh investment of more than Rs 10,000 crore and create thousands of jobs. Modi also said that the general public will benefit greatly from this policy in every way — from zero registration fee to reduction in number of accidents. He added that the policy will give new energy and security to the scrap related sector.

“Employees and small entrepreneurs will get a safe environment and will get the benefits like the employees of other organised sectors...We had to import Rs 23,000 crore worth of scrap steel during the last year as our scrapping is not productive and we are not able to recover energy and rare earth metals,” the PM said.

Gadkari, who was also present at the event, claimed that the move is likely to lead to a cut in raw material costs by around 40%. He added that 450-500 vehicle fitness centres will be opened under the new policy.

“There are about one crore vehicles in India that are plying on roads without valid fitness…The old vehicles are 10-12% more polluting than the newer ones and pose a safety hazard.”

After the policy was launched, several companies, including Tata Motors and Cero-Mahindra MSTC Recycling, announced setting up of scrappage facilities. Tata Motors said it has entered into a Memorandum of Understanding (MoU) with the Gujarat government through the Ports and Transport Department to support setting up a registered vehicle scrapping facility (RVSF) in Ahmedabad for end-of-life passenger and commercial vehicles. The scrappage centre will have the capacity to recycle up to 36,000 vehicles a year.

The scrappage policy, also called The Voluntary Vehicle Fleet Modernisation Programme, is aimed at phasing out passenger vehicles and commercial vehicles that are older than 20 or 15 years, respectively. The policy implementation will start with heavy commercial vehicles from April 1, 2023.