NEW DELHI: Finance minister Nirmala Sitharaman while presenting the Union Budget for 2021-22 announced voluntary vehicle scrapping policy to phase out old vehicles. The vehicles would be required to undergo fitness test in automated fitness centres after 20 years (personal vehicles) and 15 years (commercial vehicles).

The policy will help reduce vehicular pollution and cut oil import bill. Vehicles will undergo fitness test in automated centres. Age of the vehicles will be 15 years in case of commercial vehicles and 20 years in case of personal vehicles. The ministry of road transport and highways will announce the finer details of the policy.

The policy when implemented is expected to increase production and capacity utilization of vehicles. It is seen as an attempt by the government to boost automobile demand, which has been hit by weak consumer sentiment amid a slowdown in the broader economy. Last week, Union Transport Minister Nitin Gadkari had approved the policy of deregistration and scrapping of vehicles owned by government departments and public sector entities. Such vehicles will have to be more than 15 years old. The policy will come into effect from 1 April, 2022.