Central Government has approved the much-awaited Vehicle Scrapping Policy to scrap 15 years or more old vehicles. Subsequently, govt. will now send the documents to Goods and Services Tax (GST) Council to fix concessions by the States and Center. Road Transport & Highways Ministry is keen to implement Voluntary Vehicle Fleet Modernization Programme (V-VMP) Policy to scrap 15-year-old commercial vehicles in 1st phase.
This new finalized V-VMP Policy aims to curb rising vehicular pollution in the country. Accordingly, new scrappage policy india 2018 will give a boost to vehicle scrap business and thus making it an automobile industry hub. Moreover scrapping of vehicles will lower the prices as old vehicle scrap can be used in production of autoparts among other things.
V-VMP policy will help in creating an ecosystem for voluntary scrapping of vehicles and replacement of old polluting vehicles or otherwise banning of old vehicles. This PM Yojana will promote vehicle scrap business making the country automobile Industry hub.
Vehicle Scrapping Policy to Scrap 15 Years Old Vehicles – Details
The important features and highlights of new scrappage policy india 2018 are as follows:-
- Finance Ministry has approved new policy for scrapping of vehicles which are 15 years old or more and thus banning of old commercial vehicles.
- Voluntary Vehicle Fleet Modernisation Programme (V-VMP) Policy will now be presented in GST Council to decide the amount of concession that Government of India (GoI) and the state govt. will offer.
- Accordingly, govt. will implement this policy to promote old vehicle scrap business and make the entire country an automobile industry hub.
- The prices of automobile parts will become cheaper. Moreover, companies could use old scrap for production of auto-parts among other things which will also promote vehicle scrap business.
- Subsequently, the primary objective is to create an ecosystem to voluntary scrap and banning of old cars, trucks and other commercial vehicles.
- This decision will result in an additional Rs. 10,000 crore tax revenue as automobile sector will benefit from it.
This new draft of V-VMP policy will cover all cars, trucks and other commercial vehicles bought on or before 31 March 2005. The total number of old vehicles under scrapping policy is about 28 million or 2.8 crore. However in the first phase, this policy will include only commercial vehicles on a voluntary basis which will get extended to include private four wheelers later. V-VMP Policy in next phase will scrap total 60 million vehicles off road.
Vehicle Scrapping Policy – Impact on Pollution
This new policy for scrapping of vehicles will reduce pollution to a great extent. As per the reports, around 65% of the vehicular pollution is caused by those heavy vehicles which are 15 years or older. This is a major initiative towards scrap old cars and heavy vehicles in India.
As per the reports, one 15 year old vehicle has emissions equivalent to 25 new generation vehicles. Moreover, the auto-grade metal in India costs around Rs. 6000 per tonne. However, the original value of auto grade metal is around Rs. 12,000 – 13,000 per tonne. So, PMO is keen on implementing this scrappage india policy 2018 as soon as possible.
V-VMP policy will straight-away take off 28 million decade old vehicles / four-wheelers off road. As per the earlier draft proposal, govt. has decided to provide relief of Rs. 5 lakh on purchase of new commercial vehicle. However, this new vehicle must cost around Rs. 15 lakh. In addition to this, people will have to surrender their over 15-year old commercial vehicles.
Furthermore to achieve 22% annual growth rate of automobile industry, govt. needs to construct an additional highway lane every 3rd year. The cost of construction of 3rd lane will cost around Rs. 80,000 crore to the govt.