11 Feb 2020


Union Minister for Road Transport and Highways, Nitin Gadkari, has announced that the vehicle scrappage policy for India could be implemented within a month's time. The policy has received clearances from his end, only a nod from the cabinet remains for it to be implemented. This comes after an expected announcement during the 2020 Budget didn't materialise.
This policy is expected to urge car owners to replace older cars. This will have a two-pronged effect, stir demand in the automobile sector and reduction of pollution, given that there will be fewer less efficient cars on the road. This proposal was first put forth around the middle to 2019, but Gadkari assures that the policy is finally close to being implemented. The draft guidelines suggest that re-registration fees for cars older than 15 years be heavily increased. The end-of-life vehicles will also include those that are damaged heavily or are not properly registered. The guidelines also called for the setting up of environment-friendly scrappage facilities so as to properly process the discarded vehicles.

The scrappage policy couldn't come sooner for the Indian auto industry. The sector has been facing a heavy downturn over the last year and this development could bring some relief. Well-thought-out scrappage policies have been implemented the world over which have resulted in rejuvenating demand in vehicles. A policy such as this can also be a huge leg up for EVs in our country, given that owners could be incentivised to replace their older vehicles with EVs.