Union Budget 2021: Vehicle Scrappage Policy Introduced to Boost Auto Sector
Published On Feb 01, 2021, Updated On Feb 02, 2021
Vehicle Scrappage Policy introduced in the Union Budget to take old and polluting vehicles off the road and help in the improvement of the sales of less polluting vehicles.
In the Union Budget 2021, the Finance Minister Nirmala Sitharaman announced a Vehicle Scrappage Policy. The policy has been a part of the discussion for some time, but in the budget speech, the Finance Minister made clear that the Government of India now intends to launch the policy with a voluntary approach before making it mandatory.
It is a policy designed with the aim to induct more buses in public transport and increased investment in infrastructure. Under this scheme, personal vehicles that are 15 years or older and commercial vehicles which are older than 20 years can be scrapped which will eventually reduce urban pollution levels and galvanise automotive sales. Once this policy is launched, any private vehicle older than 20 years will need to undergo a fitness test, which will be conducted at automated fitness centres, to determine whether the vehicle is qualified to run on roads, or should be headed for the scrap heap.
In her speech, Nirmala Sitharaman said that this scheme will serve to take old, polluting vehicles off the road, which counts to almost 51 Lakh Lightweight Motor vehicles (LMV) older than 20 years and 17 Lakh medium and heavy commercial vehicles older than 15 years and help in boosting the sales of new vehicles which are less polluting and are equipped with improved security and safety features. With the introduction of this scheme, air pollution emission is also expected to go lower by 25 per cent. However complete details about the policy will be shared within the next 15 days by the Ministry of Road Transport and Highways (MoRTH).
Listing the measures in her budget, the Finance Minister also announced the capital investment of Rs. 5.54 Trillion to develop infrastructure with the objective to enhance the demand for heavy and medium commercial vehicles. The Government of India will also spend Rs. 18,000 Crore for the betterment of public transport in cities and provide 20,000 buses in the coming years. The Vehicle Scrappage Policy will certainly be going to lift the auto industry and assist in the creation of jobs for our youth besides creating the ease of mobility in the country," said the FM.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.