Vehicle Scrappage Policy Current Affairs - 2020

GoI to regulate Vintage Vehicles with new policy

The Ministry of Road Transport and Highways has issued a draft notification on December 15, 2019, to regulate the registration of old vintage vehicles. The ministry has planned to provide a special number plate with letters VA to signify the vintage vehicles.

Highlights

The Ministry has launched Regulation of vintage motor vehicles order, 2019 in order to implement the plan. The registration plates of the vehicles will bear letters “XXVAYY”, where VA stands for Vintage, XX stands for state code and YY stands for numbers between 1 and 9. It also envisages that a one-time fee of Rs 20,000 has to deposited by the owners with the state transport authorities. The deposition is valid for 10 years after which the owners have to renew their ownership. The policy is first of its kind.

Significance

The aim of implementing the policy is to avoid harassments from enforcement agencies. It will also help to identify and regulate vintage vehicles by providing scrappage exemption to them. The aim of the draft rules is to preserve vintage vehicles owing to their historic, technical, cultural and aesthetic significance.

The current Central Motor Vehicle rules that is in operation states that vehicles taking part in vintage car rallies are exempted from registration. It also says that any car that is older than 50 years is a vintage car.

Background

The policy is being implemented after its need was felt at the 55th meeting of the Central Motor Vehicles Rules-Technical Standing Committee. The committee was constituted to receive recommendations from other committees such as Bureau of Indian Standards, Automotive Industry Standards Committee and provide safety recommendations.

NITI Aayog’s concerns on Vehicle Scrappage Policy

The Ministry of Road and Transport Highways recently released Draft Guidelines for Vehicle Scrapping Facility. The guidelines include land requirements, scrapping procedures, criteria for scrapping of vehicles. It applies to all automobile collection centers, vehicle owners, required audits and finances.

The federal policy think tank on November 21, 2019, raised concerns on implementation of the vehicle scrappage policy.

The Concerns

The think tank’s major concern was over the life or age of vehicles that allows an owner to scrap them. The policy offers that the vehicle can be scrapped if its registration certificate has not been renewed in 15 years of time period. According to the think tank, this might fetch economic losses to the owners.

The think tank also fears that India might face the same fate as that of the US after implementing Cash for Chunkers scheme. The scheme in the US provided financial incentives to the car owners who volunteered to scrap their vehicles. However, the US economy failed to stimulate even after spending 3 billion USD.

Key Provisions of the policy

The policy offers rebates on road tax for owners with certificate of scrapping. It intends to set up vehicle scrapping centers and also provides guidelines for the centers. The policy says that the vehicles can be scrapped if they are abandoned or impounded by enforcement agencies, if their registration certificates are not renewed for over 15 years, or if the vehicles are beyond repair and are damaged due to natural calamities.

Significance

The GoI launched the policy to boost the automobile sector that is facing deceleration in its growth rates lately. It believes that the policy will drive vehicle sales as it includes incentives. It also aims at protecting the environment by backing the dismantling and scrapping industries.