Vehicle scrapping policy for commercial vehicles may come into effect from 2020


Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Particulars of the policy and possible benefits of it.


Vehicle scrapping policy

  1. The central government’s ambitious vehicle scrapping policy will become compulsory for all commercial vehicles from 2020 onwards and their life will be capped at 20 years
  2. The plan is to try and get the GST Council to consider a lower goods and services tax, or GST, on new commercial vehicles bought against a scrapped one, from the current rate of 28% to between 12% and 18%
  3. Once the cabinet approves the scheme, and till the deadline of 2020 when it kicks in, owners of vehicles older than 20 years can voluntarily scrap their vehicles and receive a discount on the purchase of a new one

Direction to the road ministry

  1. The road ministry has been directed to put up a proposal before the cabinet within the next three months, detailing the scheme

Government’s expectations

  1. The government expects 350,000 vehicles to be scrapped in the next two to three years

Possible benefits

  1. It will not only help curb pollution but will also improve safety on the roads
  2. Besides other benefits will also accrue from recycling of scrap

Example of other countries

  1. China managed to remove 340,000 vehicles that were over 10 years old from its roads in 2016 by providing monetary incentives to owners to replace them with new ones