Nirmala Sitharaman announced a Voluntary Vehicle Scrappage Policy, according to which private and commercial vehicles will have to undergo fitness tests after 20 years and 15 years respectively.
Finance Minister Nirmala Sitharaman announced a Voluntary Vehicle Scrappage Policy for private and commercial vehicles on Monday in the Union Budget 2021. The Ministry of Road Transport and Highways (MoRTH) will soon provide details regarding the new policy which will be implemented in India starting April 2022. As per the proposed policy, private and commercial vehicles will have to undergo fitness tests after 20 years and 15 years respectively.
“We are separately announcing a voluntary vehicle scrapping policy to phase out old and unfit vehicles. This will help in encouraging fuel efficient, environment friendly vehicles thereby reducing vehicular pollution and oil import bill. Vehicles would undergo fitness tests in automated fitness centres after 20 years in case of personal vehicles and after 15 years in case of commercial vehicles.” the Finance Minister said.
The policy also says that if a vehicle fails the fitness test more than thrice, then it will be subjected to mandatory scrapping. The announcement of the policy comes after the government's announcement of a scrappage policy for government vehicles. MoRTH on Monday approved the vehicle scrappage policy for vehicles owned by the government and public sector undertaking (PSU) which are older than 15 years.
The announcement was welcomed by the auto industry which witnessed a sharp slowdown in the sales since 2019. The government believes that the scrapping of old and unfit vehicles will encourage sales of new vehicles and reduce air pollution. Ms Sitharaman also announced a capital investment of Rs 5.54 trillion to develop infrastructure to boost the demand for heavy and commercial vehicles. She also announced Rs 18,000 crore to improve public transport and procurement of 20,000 buses in the coming years.
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