FM Nirmala Sitharaman, while presenting the Budget 2021 in the Lok Sabha on Monday, announced a voluntary vehicle scrapping policy under which a vehicle will need to undergo a ‘fit test’. The policy can take old vehicles off the road if they fail to pass the test.
However, if you don’t want your personal or commercial vehicle to get scrapped, you can do it by paying the ‘Green Tax‘. The Green Tax, however, will bring down a major share of your earnings/profit as the Green Tax, would be somewhere between 10 to 25 % of road tax.
The new policy is to ensure that the old vehicles, that cause pollution, are taken off the roads. This will result in lower emissions, better fuel efficiency and will give a boost to the automobile manufacturing sector as there would be more demand for both personal and commercial vehicles.
Sitharaman, during her Union Budget 2021 presentation, highlighted the details of the vehicle scrappage policy. “We are separately announcing a voluntary vehicle scrapping policy to phase out old and unfit vehicles,” she said. “This will help encourage fuel-efficient and environment-friendly vehicles, thereby reducing vehicular pollution and oil import bills.”
The Finance Minister went on to explain that personal vehicles will undergo fitness tests at automated centres after completing 20 years. This is 15 years in the case of commercial vehicles. “Details of the scheme will be separately shared by the ministry,” she added.
To note, not all vehicles will be scrapped or have to pay the Green tax under the scrappage policy. The scarp policy exempts vehicles like strong hybrids, electric vehicles and alternate fuels like CNG, ethanol, LPG, etc.
Vehicles used for farming purposes such as tractors, harvester, tiller, etc will also be exempted.