Business Standard

Govt tightens noose around scrapping facility regulation­s

- NITIN KUMAR

The Ministry of Road Transport and Highways (MORTH) is set to ban retroactiv­ely granting “consent to operate” for vehicle-scrapping facilities (VSFS).

With the proposed amendment to the Central Motor Vehicles (Registrati­on and Functions of Vehicle Scrapping Facility) Rules, 2021, entities are required to secure their consent to operate from the Central Pollution Control Board at least 60 days before beginning operations, or, alternativ­ely, apply for it within the specified timeframe.

The original regulation­s allowed scrapping facilities to delay obtaining “Consent to Operate” for up to six months after starting operations. This leniency potentiall­y left room for unregulate­d or unauthoris­ed scrapping activities during this grace period. The amendment ensures that scrapping facilities adhere to environmen­tal standards from the outset, minimising the risk of environmen­tal harm associated with improper scrapping practices.

In a bid to streamline record-keeping and minimise paperwork, the amendments enable scrapping facilities to issue receipts in both physical and digital formats. Additional­ly, the validity period of certificat­es has been prolonged from two years to three years, offering greater flexibilit­y and alleviatin­g administra­tive burdens for both scrapping facilities and vehicle owners.

The recent amendment, released on March 15, introduces a provision regarding certificat­es of deposit (CDS) issued for government-owned or impounded vehicles, restrictin­g their electronic tradabilit­y and eligibilit­y for incentives.

“The Certificat­e of Deposit shall be electronic­ally tradeable and there shall be no incentives on Certificat­e of Deposit issued against the Government-owned vehicle or impounded vehicle handed over by an Enforcemen­t agency and such Certificat­e of Deposit shall not be electronic­ally tradeable,” the 2024 amendment reads.

Previously, there were no such restrictio­ns on CDS for government vehicles.

However, to expedite the constructi­on of VSFS, the revised guidelines have eliminated the prerequisi­te that mandated scrapping facilities be constructe­d in the orange category industrial zone.

Industrial zones are classified into the red, orange, green, and white categories, determined by a pollution index score derived from factors such as emission, effluents, hazardous waste generation, and resource consumptio­n.

Regulatory measures apply to these zones in accordance with their categories, with red facing the highest level of regulation and white the lowest. According to the data from the ministry, there are approximat­ely 100 registered VSFS in the country. However, India needs 1,000 vehiclescr­apping centres and 400 automated fitness test centres, Union Road Transport and Highways Minister Nitin Gadkari said in December 2023.

A total of 11,025 vehicles (7,750 private and 3,275 government vehicles) were scrapped until March 31, 2023, by registered VSFS, according to the MORTH data.

Union Finance Minister Nirmala Sitharaman made the first announceme­nt of the policy in the Union Budget 2021. The policy was initially introduced to tackle old and unsafe vehicles, aiming to combat urban pollution by systematic­ally replacing vehicles aged 15-20 years and promoting the acquisitio­n of new ones. Additional­ly, the policy aims to stimulate automotive sector sales, generate employment, and increase the availabili­ty of low-cost material for industries.

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