In her Union Budget 2021 speech, Finance Minister Nirmala Sitharaman announced voluntary vehicle scrapping policy for incentivising vehicle owners to change their older vehicles for new ones. For vehicles there shall be conducted fitness test, which is 20 years for passenger vehicles and 15 years for commercial vehicles. The Ministry of Road, Transport, and Highways will give details on the policy.
As per the views of Saket Mehra, Partner, Grant Thornton Bharat LLP, " Fitness testing for both PVs and CVs a positive move to create not only employment opportunities but a move that will ensure a cleaner environment as part of the Health Infrastructure pillar. This will also boost demand for more cleaner vehicles."
The new vehicle scrapping policy will come into effect in the country on 1st April 2022. In January this year, the government released a statement: "The Minister approved the policy of deregistration and scrapping of vehicles owned by Government department and PSU, which are above 15 years in age. It is to be notified and will come into effect from 1 April 2022."
Auto stocks edged higher after the announcement of voluntary vehicle scrapping policy, meanwhile benchmark indices trade with gains of over 900 points on the Sensex and Nifty is up by 260 points at 13895.