Gadkari proposes Vehicle Scrapping Policy in Parliament, notifies rules

New Delhi, March 19, 2021

Union Minister for Road Transport & Highways Nitin Gadkari has announced a vehicle scrapping policy aimed at phasing out of unfit and polluting vehicles.

Gadkari, in a suo motu statement in Parliament on Thursday, said that, at present, India has 51 lakh Light Motor Vehicles (LMVs) older than 20 years and 34 lakh LMVs older than 15 years.

Around 17 lakh Medium and Heavy Commercial Vehicles are older than 15 years without a valid fitness certificate. Older vehicles pollute the environment 10 to 12 times more than fit vehicles and pose a risk to road safety.

“In the interest of a clean environment and rider and pedestrian safety, the Ministry of Road Transport and Highways is introducing the Voluntary Vehicle-Fleet Modernization Program or “Vehicle Scrapping Policy” which is aimed at creating an Eco-System for phasing out of Unfit and Polluting Vehicles,” he said.

The objectives of the policy are to reduce the population of old and defective vehicles, achieve a reduction in vehicular air pollutants to fulfil India’s climate commitments, improve road and vehicular safety, achieve better fuel efficiency, formalize the currently informal vehicle scrapping industry and boost the availability of low-cost raw materials for automotive, steel and electronics industry.

The ecosystem is expected to attract additional investments of around Rs 10,000 crore and 35,000 job opportunities. The ministry will in the next few weeks publish draft notifications, which will be in the public domain for 30 days to solicit comments and views of all involved stakeholders, he said.

Gadkari said the criteria for a vehicle to be scrapped is primarily based on the fitness of vehicles through Automated Fitness Centres in case of commercial vehicles and Non-Renewal of Registration in case of private vehicles. The criteria have been adapted from international best practices after a comparative study of standards from various countries like Germany, the UK, the USA and Japan.

A vehicle failing the fitness test or failing to get a renewal of its registration certificate may be declared as an End of Life Vehicle.

Criteria to determine vehicle fitness will be primarily emission tests, braking, safety equipment among many other tests which are as per the Central Motor Vehicle Rules, 1989.

It is proposed that commercial vehicles be de-registered after 15 years in case of failure to get the fitness certificate. As a disincentive measure, increased fees for fitness certificate and fitness test may be applicable for commercial vehicles 15 year onwards from the date of initial registration.

It is proposed that private vehicles be de-registered after 20 years if found unfit or in case of a failure to renew the registration certificate. As a disincentive measure, increased re-registration fees will be applicable for private vehicles 15 year onwards from the date of initial registration.

It is being proposed that all vehicles of the Central Government, State Government, Municipal Corporation, Panchayats, State Transport Undertakings, Public Sector Undertakings and autonomous bodies with the Union and State Governments may be de-registered and scrapped after 15 years from the date of registration.

The scheme will provide strong incentives to owners of old vehicles to scrap old and unfit vehicles through registered scrapping centres, which shall provide the owners with a scrapping certificate.

Some of these incentives include scrap value for the old vehicle given by the scrapping centre, which is approximately 4-6% of the ex-showroom price of a new vehicle.

The state governments may be advised to offer a road tax rebate of up to 25% for personal vehicles and up to 15% for commercial vehicles. The vehicle manufacturers are also advised for providing a discount of 5% on the purchase of a new vehicle against the scrapping certificate.

Besides, the registration fees may also be waived for the purchase of a new vehicle against the scrapping certificate.

The Ministry of Road Transport and Highways will promote the setting up of Registered Vehicle Scrapping Facility (RVSF) across India and will encourage public and private participation for opening up of such centres. Efforts are also being made to set up Integrated Scrapping Facilities across India.

Some of the identified places include Alang in Gujarat, where it is being planned to develop a highly specialized centre for scrapping among many other potential centres, where different scrapping technologies can be synergized together.

With a simplified registration process through a single window, the scrapping facility will have to comply with environmental and pollution norms and with all applicable acts of law. It shall be ensured that the scrapping centres have an adequate parking facility, de-pollution equipment for air, water and sound pollution and adequate facilities for hazardous waste management and disposal.

Similarly, the Ministry will promote the setting up of Automated Fitness Centres on a PPP model by the state government, private sector, automobile companies etc

These centres may have adequate space for test-lane, IT servers, parking and free movement of vehicles. To avoid conflict of interest, operators of fitness centres shall only provide testing facility and shall not provide repair/sale of spare services. Appointment for fitness centres may be booked online and tests reports shall also be generated in an electronic mode.

The tentative timeline for the application of the proposed scrapping policy is as follows:

Rules for Fitness Tests and Scrapping Centres on October 1, 2021. The scrapping of Government and PSU vehicles above 15 years of age will be April 1, 2022. Mandatory Fitness Testing for Heavy Commercial Vehicles on April 1, 2023. Mandatory Fitness-Testing (Phased manner for other categories) June 1, 2024.

The Ministry of Road Transport & Highways later notified draft rules for setting up Registered Vehicle Scrapping Facility (RVSF). The rules lay down the procedure for setting up, authorization and operation of RVSF. Key features are:

- These RVSFs shall be provided access to the VAHAN database and shall be authorized to make entries regarding scrapping of the vehicle & issuance of Scrapping Certificate.

- Other access to NCRB & police database will also be provided for verification of stolen vehicle or vehicle involved in criminal activity, before scrapping a vehicle.

- The rules specify the technical requirements and procedure to be followed by any legal entity for setting up RVSF.

- The Government will develop a portal for single-window clearance, on which the applicant will apply with documents and fee. State/UT governments would clear the proposal in a time-bound manner, that is, 60 days.

- The application process is proposed to be made seamless, transparent and time-bound for registration, inspection and audit of RVSF.

-The RVSF must take cybersecurity certifications for safe access to the VAHAN database. The registration of an RVSF shall be valid for an initial period of 10 years and renewable for 10 years at a time.

-Besides the requirement for having certified equipment for de-polluting, de-risking and dismantling End of Life Vehicle (ELV), the RVSF will have to comply with relevant health and safety legislation/regulation and environmental norms laid down by MoEF & CC and CPCB/SPCB for such operations.

- In case the RVSF does not have the adequate capability for recycling hazardous waste (like e-waste, batteries, or for recovery of rare-earth metals, etc.), then such materials can be sold to duly authorized recyclers.

- The RVSF, after verifying the original documents from the owner/representative and records of the vehicles, issues the ‘Certificate of Deposit’, which can be used to avail incentives and benefits for the purchase of a new vehicle.

- The RVSF shall keep safe custody of a cut piece of Chassis Number for 6 months from the date of issue of ‘Certificate of Vehicle Scrapping’ and maintain a copy of all documents for record and examination during the audit.

Objections and suggestions to these draft rules have been invited within 30 days from the date of publication of these draft rules.

NNN