How the new vehicle scrappage policy may affect you

As per the policy, cars that are older than 20 years must undergo a fitness test at an automated centre

Prime Minister Narendra Modi on Friday launched the National Automobile Scrappage Policy. This policy aims at junking unfit and polluting vehicles.

As per the policy, commercial vehicles and cars that are over 15 and 20 years old must undergo a fitness test at an automated center that will check whether the car is fit to be on the road. If the car fails the test, it is up to the owner to scrap the vehicle, but it will not be allowed to run on roads, since it will be deregistered.

As per a report by Moneycontrol, the fitness test of the vehicle will cost a whopping Rs 40,000. This will be in addition to the Green Tax that will be levied which is mandatory while renewing your private vehicle’s registration after the 15-year period.

However, in case your vehicle does pass the fitness test, it will be allowed to run on the road for a period of years only, after which it will have to undergo the test yet again, at the same cost.

The financial cost of keeping a car in road-ready shape hopes to prevent the owners from running old cars that cause pollution and increase India's steel scrap exports and also create more jobs.

Also Read | PM Modi launches vehicle scrappage policy, hopes to create huge job opportunities

All the additional costs appear to make owning 15 to 20-year-old vehicles a financial burden for private vehicle owners. Automakers will hope that these costs will lead vehicle owners to increase their frequency of buying an automobile, thereby driving up manufacturers' sales.

As per the figures shared by Union Road Transport Ministry, of the are around one crore unfit vehicles in the counrty which can be recycled immediately, around 4 lakh are in Gujarat.

Earlier in February, Union Minister Nitin Gadkari had said: "The policy would cover an estimated 51 lakh Light Motor Vehicles (LMVs) that are above 20 years of age, while another 34 lakh LMVs are above 15 years. It would also cover 17 lakh medium and heavy motor vehicles, which are above 15 years, and currently without valid fitness certificates."

Highlighting a key feature of the policy, Modi said that instead of the age of the vehicle, a fitness test will determine if the vehicle will be sent for scrapping. The policy would attract an investment of Rs 10,000 crore and create thousands of employment opportunities, he said.