The Finance Minister Ms Nirmala Sitharaman on Monday presented the union budget for 2021-22 the budget she announced New vehicle Scrappage policy,
let us take you through what is vehicle scrappage policy – how it’ll affect new and old cars.
Statement by Finance minister:
We are separately announcing a voluntary vehicle scrapping policy. which aims to phase out old and unfit vehicles.
The policy will encourage environment-friendly and fuel-efficient new vehicles. under the policy,
Vehicles would undergo fitness tests in automated fitness centres. after 20 years and 15 years of use. Details of the scheme are yet to be shared.
Purpose of Vehicle Scrappage policy:
The aim of policy is to phase out private and commercial vehicles which are 20 and 15years older.
New Policy will help automobile makers by generating additional demand of fuel-efficient and environment-friendly vehicles.
How New policy help Environment
Finance minister presenting the budget said voluntary vehicle scrapping policy will encourage environment-friendly fuel-efficient cars.
Vehicles have to undergo a fitness test at the automated fitness centres and its test results will confirm whether the vehicle is fit for roads.
What Vehicle Scrappage policy covers
The policy will cover approx one crore light, medium and heavy motor vehicles. which contributes to 10-12% additional pollution. it’ll lead to new investments of Rs10,000 crores approx and create 50,000 employments.
Union Minister Nitin Gadkari said with this policy the demand for new vehicles increase and automobile industry will reach INR 6 lakh crores from the present INR 4.5 lakh crores.
As per policy, after a time of 15 and 20 years vehicles have to undergo a fitness test to obtain fitness certificate which shall remain valid for a time of 5 years.
Cost of each fitness test will be Rs40,000. same is in addition to the road and green tax announced earlier.
After 05 years, the vehicle has to re-undergo the same fitness test at the same cost.
What is Green Tax
In the past, GOI announced plans to introduce the Green tax, which is considered as a step to protect the environment and control pollution.
The revenue collected from this tax will be used in initiatives started to tackling pollution. vehicles which are running on other fuel modes like CNG, LPG, Electricity, Ethanol shall be exempted.
Under green tax policy, transport vehicles older than eight years old shall be with charged with green tax.
It is important to know that at the time of fitness certificate renewal the green tax rates shall be 10 to 25% of road tax
Categories: Car News