Scrapping Pollutants Away
Business Today|May 30, 2021
India’s scrappage policy for automobiles has the potential to reduce pollution and the industry’s carbon footprint while creating employment and demand. It’s a $6-billion opportunity
Sumant Banerji

When Nitin Gadkari, Minister for Road Transport and Highways and MSME, spelt out the contours of India’s first vehicle scrappage policy in mid-March, it was the culmination of a process that started more than a decade ago. The multipronged policy, which seeks to replace ageing and outdated vehicles in favour of modern and more technologically advanced versions on the road, would effectively come into force only from June 1, 2024 when fitness tests become mandatory for most cars and SUVs. Under the new policy, the Ministry of Road Transport and Highways has advised automobile manufacturers to provide a 5 per cent discount on the purchase price of a new car for anybody who buys them after scrapping the old vehicle. It has also asked state governments to waive off registration fees on the new vehicle. This will be on top of the scrap value of the old vehicle, which could be anywhere around 4-6 per cent of the ex-showroom price of a new car. For heavy commercial vehicles, fitness tests will become mandatory from April 1, 2023.

It could still be anti-climatic, though. Voluntary in nature, the policy announced so far feels more like a work in progress than a finished product. None of it is binding as of now. In automotive parlance, it is akin to a clay model and not a metal body. From his own end, Gadkari has requested the finance ministry to offer some rebate in Goods and Services Tax (GST), but a response is awaited.

It does not, however, undermine the importance of the policy itself, or its potential to solve multiple problems at the same time. The biggest of them is reducing carbon footprint and cleaning up the environment. There are an estimated 68 lakh vehicles currently plying on roads that are older than 15 years and can potentially be scrapped. A significant number of them do not conform to any significant emissions regulations — India embarked on a formal emissions road map only in 2000. These numbers would rise exponentially when a similar policy for two-wheelers, which is also in the works, is ready.

THE BENEFITS

68 lakh

No. of old cars, trucks, and buses that may potentially be scrapped. They emit 10-12 times more than fitter modern vehicles

What happens when a 10-year-old truck is replaced by a new BS Vi-compliant truck on the road?

28 per cent

Reduction in particulate emission

18 per cent

Reduction in hydrocarbon and nitrogen oxide emissions

17 per cent

Reduction in carbon dioxide emissions

50 per cent

Reduction in carbon emissions in steel-making when 97 per cent recycled steel is used instead of iron ore

46 acres

Landfill site that can be saved by recycling vehicles

165 million tonnes

India’s projected annual waste generation in 2030, against 62

MT in 2019

₹10,000 crore

Projected fresh investment towards setting up fitness centres and scrapping facilities

35,000

Employment opportunity in the new business

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