PM Modi Launches Vehicle Scrappage Policy 2021


New Delhi: Prime minister Modi on Friday launched the Vehicle Scrappage Policy at the Industrial Summit in Gujarat.

Emphasizing the need to phase out old vehicles, PM said that the procedure is a significant milestone in India’s development journey. He also called upon youth and startups to make the initiative successful.

In the works since 2015, the policy is aimed at providing incentives to owners of old and polluting vehicles to dismantle them safely.

However, the policy will still take another two to three years before it is implemented for government-owned vehicles.  

” We are looking forward to scrap vehicles, which are 15 years or older, owned by the central and state government by April 2022″, said Giridhar Aramane, secretary in the Road and transport and highways ministry.

From 2023 onwards, the policy seeks to dismantle heavy commercial vehicles which don’t conform to its rule and are over 15 years old. Personal vehicles that have been in use for 20 years or more will begin to be dismantled in 2024.

Speaking about the monetary gains from this policy, the secretary highlighted that scrapping an over 15-year-old Maruti Swift Dzire and replacing it with a new car can add Rs 115,000. 

Is India equipped with the required Infrastructure such as Scrapyard and fitness centres? 

India’s scrapping industry is massively unorganized. Old vehicles are handled mainly by the roadside garage and kabadiwalas, posing health and environmental hazard problems.

Secretary Aramane acknowledging the need for Infrastructural buildup, said, “The scrapping facilities are highly unorganized, located in major cities, who buy the vehicle and do the dismantling manually without any machinery, which makes the process inefficient.

So the recycling, recovery and reuse from the scrapped vehicles are minimal, which causes serious economic loss.”

The government is hopeful of generating employment for about 35,000 people at vehicle fitness centres and Scrapyards and a collective investment of Rs 10,0000 crore. It is to be noted that about 60 vehicle Scrappage centres will be set up by the private sector with help from state governments.

During the launch, Union minister Nitin Gadkari quoted a number of around one crore unfit Vehicles in India. The scheme is aimed to phase every unsuitable vehicle and create a circular economy.  

Reuse of scraped materials 

The new policy seeks to channelize the used Material – copper, aluminium, steel, rubber and plastic back into the production of new cars. Nitin Gadkari said,” “We aim for maximum recovery up to 99 per cent.

This will increase the availability of materials and reduce costs by up to 40 per cent for raw materials, thereby fuelling India’s competitiveness globally”. 

How has the Auto Industry received the Scheme? 

Auto Industry veteran has welcomed the policy that will generate wealth from waste and jobs. 

Tata Motors’ Executive director and President, Girish Wagh, dubbed the move as a historic step for the company to participate in vehicle scrapping space.

He also pointed out that Tata Motors is already setting up a Registered Vehicle Scrapping Facility (RVSF) in Ahmedabad to recycle up to 36,000 vehicles per year. 

Renault India CEO and MD Venkatram Mamillpalle said, “This policy will provide the much-needed impetus in countering the old methods of scrapping, which were counterproductive.

The policy augurs greater investments and will significantly prune the raw material cost and support the refurbishment of sheet metal recycling.” 

Satvik Singh
Satvik Singh
Satvik Singh is Teaching Assistant for foundation Programme at Amrut Mody School of Management , Ahmedabad University. Prior to his appointment at the University, he received a bachelor degree in English from Banaras Hindu University and subsequently a master degree(English) from Pandit Deendayal Petroleum University. His area of research during Masters studies were Indian Philosophy and Gender Studies. Satvik dreams of a day when characters from his amorphous musings would confront him in the corner street. An admitted Stock market fanatic, he feeds his addiction by watching Penny stocks chart on Sunday afternoon.



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