Tardy progress in vehicle scrap policy
An internal audit by the Union government has found that states have made little progress in implementing the vehicle scrappage policy announced in 2021, leading to the stalling of a programme that aims to phase out old, polluting vehicles, said one person in the know.
The audit report was shared with senior cabinet ministers, the person said, speaking on condition of anonymity.
The audit report comes at a time the country’s top policymakers are reviewing the vehicle scrappage policy after it failed to gain traction. Many vehicle owners continue to operate their older, more polluting vehicles beyond the end of the registration period, rather than scrapping them. Many prefer re-selling such vehicles, often in the hinterland. The audit found that only a handful of the states have followed through on policy implementation, including setting up of automated testing stations (ATS), registered vehicle scrapping facilities (RVSF), and instituting incentives and disincentives for vehicle users. Among the 16 states analyzed, seven, including Delhi, were found to have made no progress whatsoever in implementation of the policy, while the progress of other states was judged to be inadequate.
The scrappage policy envisioned statesissuingtenders for setting up
ATSs through the public private partnership (PPP) route, as well as promoting the development of RVSFs across the country. Amongthestatesaudited,Maharashtra,WestBengal,Delhi,Haryana, Odisha, Karnataka and Punjab have given multiple extensions to tenders for ATSs, while Telangana and Tamil Nadu have made no progress in this regard.
Meanwhile, Maharashtra, Kerala, Delhi, Andhra Pradesh, Tamil Nadu, Telangana and Gujarat have made no progress in waiver of registration fee and giving motor vehicle tax rebates to people scrapping their vehicles, the audit report found. Delhi has not even announced motor vehicle tax concession for citizens, the report noted.
Just about 52,000 vehicles have been scrapped since the policy was announced, the report found, of which around 32,400 were government vehicles. For context, over 4 million cars were sold in India in 2023 alone. To remedy the situation, the audit report has suggested an amendment to the ATS and RVSF rules to make them simpler. The report has also suggested liaising with automakers for extending discounts to people scrapping their vehicles.
Launched in August 2021 by Prime Minister Narendra Modi, the scrappage policy looks to reduce pollution by junking unfit vehicles, improve road safety by having newer, safer vehicles on roads and improving the national fuel efficiency of vehicles. The policy, if implemented well, will likely boost the automotive sector, creating more jobs and formalizing the informal scrappage industry.
The policy had outlined levers such as waiver of registration fees on new vehicles, rebate on motor vehicle tax for new vehicles, and higher fitness-testing certificate fee for vehicles older than 15 years to encourage scrapping among vehicle owners.
The country’s top policymakers are reviewing the vehicle scrappage policy after it failed to gain traction