Ministry of Transport launches vehicle scrapping policy; automakers to provide

In order to phase out obsolete and environmentally harmful vehicles across India, the Ministry of Road Transport and Highways has launched a voluntary vehicle modernisation programme, commonly known as the Vehicle Scrappage Policy. The programme is currently being implemented by over 60 Registered Vehicle Scrappage Facilities (RVSFs) in 17 states and union territories and 75 Automatic Testing Stations (ATSs) in 12 states and territories. In a meeting with a delegation from the Society of Indian Automobile Manufacturers (SIAM), Union Minister Nitin Gadkari emphasised the programme’s goal of replacing obsolete, polluting vehicles with cleaner, more eco-friendly models.

When the scheme was first introduced, owners of scrapped cars (and with a certificate of deposit) were eligible for car manufacturer discounts on new models, waived registration fees and road tax exemptions. In addition, state governments were told that motor vehicle tax relief of up to 25% could be granted for non-transport vehicles and up to 15% for transport vehicles. The Department of Transport has now announced that all outstanding debts on scrapped vehicles will be waived.

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Several manufacturers offer deep discounts

The Ministry of Road Transport and Highways (MoRTH) said several passenger vehicle (PV) manufacturers have agreed to provide discounts for one year under the vehicle scrapping policy to buyers with a certificate of deposit (CoD) or scrapping certificate. These discount offers are aimed at encouraging scrapping of obsolete vehicles, thereby making the roads cleaner, safer and more efficient.

“Each passenger vehicle manufacturer is entitled to offer this discount only on specified models in its vehicle portfolio. Since the vehicles are not replaced but only scrapped, between the replacement and scrapping discounts, only the scrapping discount will be applicable,” the ministry said.

Several companies offer a discount of 1.5% of the ex-factory price of a new car or Rs 20,000 (whichever is lower) if the owner scraps the car within six months. These discounts are in addition to the scrapping value offered by the Registered Vehicle Scrapping Facility (RVSF) and other existing government incentives.

The car manufacturers offering discounts to buyers include Maruti Suzuki India, Hyundai, Tata Motors, Mahindra, Kia India, Toyota, Honda Cars India, JSW MG Motors, Renault India, Nissan India, Skoda Auto India and Volkswagen India.

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The ministry said in an official statement that carmakers can choose to voluntarily provide additional discounts on specific models and the information of scrapped vehicles will be linked with the VAHAN system.