MoRTH looks to boost vehicle scrappage with new incentives

Last updated 2 months ago
Car Scrapping Policy - Scrapyard
Last updated 2 months ago

The 2021 Voluntary Vehicle-Fleet Modernization Program (VVMP) introduced to Reduce pollution by scrapping 1 Crore vehicles without valid fitness and registration has gotten a boost from the government. Since its launch, this incentive has not seen significant response, due to which the government has now increased the benefits that were previously being offered. 

This initiative was launched keeping the following in mind:

  • Improve road, passenger and vehicular safety 
  • Improve fuel efficiency and reduce maintenance cost for vehicle owners 
  • Boost auto sector sales and generate employment 
  • Formalize the currently informal vehicle scrappage industry 
  • Boost availability of low-cost raw materials for automotive, steel and electronics industry 

When the policy was first introduced, it offered vehicle owners incentives such as registration fee waivers, road tax concessions, and discounts from carmakers when purchasing a new model after scrapping their old vehicle and obtaining a Certificate of Deposit. Additionally, state governments were notified to provide a motor vehicle tax concession of up to 25% for non-transport vehicles and up to 15% for transport vehicles.

Now, the Ministry of Road Transport and Highways (MoRTH) has announced an additional benefit: any pending liabilities on the vehicle being scrapped will also be waived. The ministry also posted about the new incentive on X and stated that leading car brands will offer bigger discounts than before on receiving a valid certificate of deposit. 

Summary

While vehicle scrappage has not been popular, the government hopes to remove older vehicles from the roads in an effort to boost emissions control as well as reinforce demand for new vehicles. The new incentives will bolster the government’s initiatives to increase vehicle scrappage in the coming years. 

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