India has 51 lakh light motor vehicles that are over 20 years old and 34 lakh light motor vehicles that are over 15 years old. Around 17 lakh medium and heavy commercial vehicles are over 15 years old without a valid fitness certificate. These older vehicles pollute the environment 10 to 12 times more than fit vehicles and pose a risk to road safety. The Economic Survey 2019 mentions that around 21,895,439 vehicles will reach their end of life by 2025, generating around 10 million tons of steel scrap. Considering India’s fragmented vehicle scrap collection process, effective waste management remains doubtful. Taking cognisance of these concerns, the Government announced the Vehicle Scrapping Policy 2021 on 18 March 2021, intended to put an organised recycling ecosystem in the interest of a clean environment and better road safety. But would such core underpinning concerns be effectively addressed by the Vehicle Scrapping Policy 2021?
Against this backdrop, first-year M.A. PPG students of Chinmaya Vishwavidyapeeth (CVV) organised a webinar on 06 May 2021 to unlock the policy issues surrounding the Vehicle Scrappage Policy 2021 and to provide an additional discourse on the subject.
The key speaker, Arth Mishra, an Engineering Physics Graduate, discussed the key aspects of the policy by elaborating on critical policy highlights, policy implications, and interlinkages with other contemporary government policies. Discussing the timeline, he shared that the policy was first mooted in 2015 by Sri. Nitin Gadkari and how over the years travelling through various studies and concepts notes by the MoRTH, it culminated in a notification in November 2018 for mandatory deregistration of all commercial vehicles over 20 years old, before the final announcement of the Vehicle Scrappage Policy on 18 March 2021 by him in the Lok Sabha. Arth detailed three critical aspects. Firstly, he pointed out that due to the voluntary nature of the policy, the journey of a vehicle from de-registration to End of Life (EOL) to a scrappage yard is doubtful and indicated the need for a more nuanced technical analysis driven categorisation for the scrapping of vehicles. Adding to it, he also explained how the existing poor compliance and missing penal measures will further lead to ineffective execution of scrapping older vehicles. Secondly, he discussed how excess discretion given to the States and the fiscal challenges present in the proposed incentive structure may contribute to uncertainty in consumers’ benefits to sell their old vehicles. Thirdly, he analysed the benefits and challenges of setting up registered vehicle scrappage facilities (RVSF) across the country.
Talking about the policy implications, he shared the positive aspects for the three main stakeholders – consumers, industry, and government. He asserted that consumers will be getting both tangible benefits like incentives, more availability of second-hand vehicles at low rates, and intangible benefits that can be ascribed to the voluntary nature of the policy, decreased exploitation in proposed automated fitness centres and good health from low pollution caused by older vehicles. The industry will also get a boost through the formalised Recycling Industry via low-cost raw materials to MSMEs, automobile sector, electronic and plastic industry, increase in investment, job creations, demand for the new vehicle (including e-vehicle), and growth in the second-hand market of vehicles. The policy will help the government to reduce the fuel and steel import bill in the long run, to contribute more to its Paris Agreement Commitments and SDG goals, to lessen the road accidents, and will pave the way for the country to evolve as a hub of sustainable automobile manufacturing industries. Thereafter, the key speaker established linkages of the policy with the environment, steel scrap recycling policy, e-vehicle policy, fuel policy, road safety, and medical burden by air pollution. Lastly, he concluded by giving relevant and feasible policy recommendations that are desirable for realising the intended benefits of the policy.
The first discussant, Arun Kumar, a Civil Engineering graduate, looked into international experiences of vehicle scrappage policy. He said that policymakers studied the international experiences from the EU, Germany, Korea, China, and the USA on Vehicle Scrappage Policy, and found India’s proposal on the same having something missing. Though the dismantling and scrappage sectors seem promising, it is not so in the practical sense. In a study, the Indo German Environment Partnership (IGEP) Programme in partnership with Central Pollution Control Board conducted surveys with the stakeholders of the End of Life Vehicle (ELV) sector, clearly reflects that the new components of automobiles are not easily recyclable because of the complexity of the re-engineering process. It asks the Original Equipment Manufacturers (OEMs) or the Auto Component Manufacturers to handhold the already existing large domestic informal ELV sector. Since vehicle scrapping is a valued supply chain, the Centre, state, and OEMs should take responsibility for bringing out a sustainable and formalized growth model for the ELV sector. Also, the Swedish model of Individual Financial Responsibility wherein the OEMs organize, upgrade and utilize the already existing dismantling and recycling sector can also be experimented with in India because of the high initial investment of the sector. Rather than venturing into a small-scale sectoral boost, here in the case of the auto sector, structural adjustments are the need of the hour because of the rise of ELVs in the coming years. These are some of the areas that the policy could have looked upon to fulfill its goal, which aligns with the circular economy concept and the global sustainability goals 2030.
The second discussant, Aswathi Prakash, a Political Science graduate, looked into various aspects in and around environment and climate change. Expressing her views, she reflected that even though the older vehicles are smaller in number, their contribution to vehicular pollution in the country is disproportionately high because they emit 10-25 times more pollutants than modern vehicles. The mechanism in place to check vehicular pollution is limited to emissions and does not include their road performance and hence are inefficient. To substantiate her findings, she drew a proclamation from a study by HDFC bank which estimated that if all the older and unfit vehicles in the country are phased out it will reduce CO2 emission by 17% and particulate matter in the air by 24%. India’s climate actions are governed by NAPPC (National Action Plan for Climate Change) and INDC (Intended Nationally Determined Contribution). In the case of this policy, incentives on the scrappage are at the discretion of states and not mandated and hence it makes the policy vulnerable to not reaching its effectiveness. Also, the road tax is a significant part of state revenue and hence some states may be at a disadvantage. The discussant explained this by giving the example of Delhi. In her concluding remarks, she recommended homogeneity in the policy across the country for the envisaged expected outcomes.
The discussion towards the end of the webinar focused on a few key questions raised by the audience, including contentions on the government’s proposal to establish vehicle scrappage centres aligned to its existing Alang Ship Recycling Yard, Gujarat, at/near ports, which may contribute to metal pollution in the sea, how rational it is to provide different treatment to first-time vehicle buyers and vehicle buyers after scrapping the old vehicle, what are the plans of the government to recognise the existing scrap facilities, statistics given by the government on how the policy will accelerate the country’s journey towards the Paris Agreement goals and whether the policy intended to increase the socio-economic condition of the people.
The webinar was effectively moderated by Priyanka, a Law Graduate, having a quantum of field experience in the social sector.
Report by:
Arth Mishra, Veena Mahor, Arun Kumar S., Aswathi Prakash
First-year M.A. PPG
