Syllabus: GS3/ Economy
Context
- The Ministry of Road Transport and Highways has launched the Voluntary Vehicle Modernization Program or Vehicle Scrapping Policy to create an ecosystem for phasing out unfit polluting vehicles across the country.
About
- The Program and Policy will be implemented through a network of Registered Vehicle Scrapping Facilities (RVSFs) and Automated Testing Stations (ATSs).
- Presently, there are sixty-plus RVSFs across 17 States / UTs and seventy-five ATSs across 12 States / UTs operational in the country.
- Recognising the importance of Fleet Modernization and Circular Economy, multiple Commercial and Passenger Vehicle Manufacturers have agreed to offer discounts for a limited period against a Certificate of Deposit (Scrappage Certificate).
- Commercial Vehicle and Passenger Vehicle manufacturers have shown a willingness to offer discounts for a limited period of two years and one year respectively.
Advantages of Vehicle Scrapping Policy
- Rise in demand for new cars: With old vehicles being scrapped, the demand for new vehicles will rise. More than 51 lakh light motor vehicles (private and commercial) are more than 20 years old.
- Employment growth: Establishing scrapping centers and the increase in vehicle sales will lead to job creation in various sectors including manufacturing, services, and recycling.
- Better air quality: Scrapping unfit vehicles will result in less air pollution and better air quality.
- Best price for scrap: Vehicle owners will get the best price for car scrappage for workable parts such as tyres. The recycling industry will also be more active leading to higher revenue.
- Better Fuel Efficiency: Newer vehicles are generally more fuel-efficient, leading to savings in fuel consumption and reducing the country’s dependency on fossil fuels.
Challenges
- Financial Burden: Owners of older vehicles, particularly those from lower-income groups, find it financially burdensome to replace their vehicles, even with incentives.
- Waste Management Challenges: The scrapping of millions of vehicles lead to challenges in managing the waste generated, including hazardous materials like batteries, oil, and electronic components.
- Market Disruptions: The sudden influx of scrapped vehicles and the push for new ones could create disruptions in the automotive market, affecting prices and demand unpredictably.
Way Ahead
- To fully realize the potential of the scheme there is a need to ensure that scrapping centers are easily accessible to vehicle owners, especially in rural and semi-urban areas.
- Also establish a mechanism for regularly reviewing the policy’s impact and make necessary adjustments based on technological advancements and changing environmental needs.
- Provide support for small businesses and workers in the unorganized sector who may be affected by the policy. This could include retraining programs, financial assistance, or opportunities to transition into the new automotive ecosystem.
Source: AIR