Budget 2021-22: Vehicles 15 or 20-year-old will go to scrap

Srinagar: If you known a personal vehicle that is 20-year-old or a commercial vehicle 20-year-old, it will now need to go through a fitness test; failing which it would go to scrap.

Finance minister Nirmala Sitharaman said in her budget speech today that a voluntary scrappage policy is to be launched, aimed at reducing vehicular pollution. There will be a fitness test after 20 years for personal vehicles, 15 years for commercial vehicles.

This means commercial vehicles like buses and trucks in Jammu & Kashmir, which are 20-year-old, and which might fail fitness tests shall have to be scrapped.

The measure announced in the Budget is said to be intended to encourage replacement of old vehicles by fresh ones to help greater economic activity in the country.

However, executives of the automobile industry said that the move will largely impact sale of commercial vehicles like buses and trucks, but is unlikely to give a fillip to sale of personal vehicles.

There are also fears that buying of new commercial vehicles could end up passing on the extra cost to freight sector, resulting in more inflation.

As part of the discouraging old vehicle, the ministry of road and transport recently announced imposition of “green tax” on old, polluting vehicles. The proposal will go to the states for consultation before it is formally notified.

According to the proposal, green tax will be imposed on transport vehicles older than eight years at the time of renewal of the fitness certificate — at the rate of 10-25 per cent of road tax. Personal vehicles will also be charged the same levy at the time of renewal of registration certification after 15 years.

The government estimates that vehicles older than 15 years constitute about five per cent of total fleet but account for 70 per cent of vehicle pollution.

After scrapping their old vehicles, the new ones may be entitled to a waiver of registration fee and a discount on road tax. The incentives have been proposed by the Ministry of Road Transport and Highways (MoRTH) in its long-pending draft vehicle scrappage policy.