India is home to about 50 lakh light motor vehicles that are more than 15 years old. With time, automobile efficiency decreases and they begin to cause more pollution. To reduce vehicular air pollution and move towards more sustainable mobility, the government of India has introduced a new vehicle scrapping policy. This policy aims to phase out unfit and polluting vehicles and promote a circular economy.
Salient Features of the Vehicle Scrapping Policy
- India Vehicle Scrapping over 15 years for commercial vehicles and 20 years for personal vehicles will have to undergo a fitness test in automated fitness centers that will be set up across India. Unfit vehicles will be deregistered.
- Incentives will be provided to owners of old vehicles to scrap their vehicles. A certificate of deposit will be issued which can be redeemed for purchasing a new vehicle. The amount will vary according to the model, fuel type, and scrapping company.
- This policy is expected to increase the average life of vehicles in India. It will lead to a reduction in raw material needs for manufacturing and reduce the import bill.
- Automobile manufacturers will also provide a 5% discount on the purchase of a new vehicle against the scrapping certificate. This will encourage people to discard their old vehicles and replace them with new ones.
- The policy aims to set up registered vehicle scrapping facilities across India that follow standardized authorization and recycling procedures. Proper facilities will ensure scientific dismantling and recycling.
Benefits of Vehicle Scrapping
The vehicle scrapping policy is expected to yield significant economic and environmental benefits:
- Reduction in Pollution: Older vehicles cause more pollution as emissions norms get stricter over the years. Scrapping old vehicles will help reduce greenhouse gas emissions and improve India's air quality.
- Lower Raw Material Requirements: It is estimated that around 27 million tonnes of ferrous scrap and 3.5 million tonnes of non-ferrous scrap will be available for recycling by 2025. This will reduce India's import dependence for raw materials.
- Boost to the Automobile Industry: The incentive-based scrapping along with a discount on new vehicle purchase will boost replacement demand. It will be a win-win for both customers and OEMs. The auto industry is estimated to see a 10-15% rise in new vehicle sales.
- Road Safety Improvement: Old vehicles with worn-out parts have the potential to cause accidents. Mandatory fitness tests for old vehicles will also contribute to improving road safety.
- Job Creation: The scrappage centers and recycling plants have the potential to generate new employment opportunities. It is estimated that the vehicle recycling industry will create around 50,000 additional jobs.
Challenges in Implementing Vehicle Scrapping
While the vehicle scrapping policy aims to address a critical issue, its implementation also faces certain challenges:
- Lack of Adequate Infrastructure: Setting up authorized automated fitness centers and responsible scrapping facilities across India as per standards will require massive investments and time. Currently, infrastructure is inadequate.
- Absence of Incentivization: If the announced incentives like the scrap value offered are not reasonable enough or awareness is not created, people may not voluntarily scrap their old vehicles defeating the policy's purpose.
- Determining Vehicle Fitness: The methodology to accurately check fitness standards of old vehicles needs to be established. Sub-standard testing can allow unfit vehicles to remain on roads.
- Illegal Scrap Dealers: Unauthorized scrap dealers may dismantle vehicles unscientifically for profits. Strict regulation and monitoring are needed to prevent adverse environmental and safety impacts.
- Initial Costs to Owners: For owners with very old vehicles, the upfront costs of scrapping and buying a new vehicle can be unaffordable despite discounts and incentives. This may require additional facilitate financing options.
- Supply Chain Issues: Setting up a well-functioning circular supply chain network for dismantling and recycling scraps efficiently will take substantial effort and investments.
In an India's vehicle scrapping policy is a big positive step that has the potential to significantly boost sustainable urban mobility and transportation. However, its success will depend on proper implementation, plugging gaps in infrastructure and incentives, and addressing challenges. With coordinated efforts from different stakeholders over time, the policy aims to phase out unfit vehicles, promote a circular economy, and reduce pollution burden in India.
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