Chandigarh,  Haryana is all set to introduce a five-year vehicle scrappage policy that has been formulated in sync with the Voluntary Vehicle Fleet Modernization Programme of the government of India to encourage the scrapping of vehicles that have attained the critical age of 10 years in case of diesel and 15 years in case of petrol vehicles.

The Cabinet, presided over by Chief Minister Manohar Lal Khattar, here on Thursday approved the policy draft inspired by the idea of a circular economy that depends on the re-use, sharing and repair, refurbishment, remanufacturing, and recycling of resources to create a closed-loop system by minimizing the use of resources, the generation of waste, the pollution and carbon emissions.

The policy will be applicable to all end-of-life vehicles.

Under this policy, an incentive-based system will be introduced to facilitate the phasing out the unfit vehicles. Furthermore, disincentives will be utilised to make use of old unfit vehicles -- a costly affair.

The policy also objectifies an increase in the exchequer by promoting the purchase of vehicles in replacement by motor vehicle owners. Monetary benefit will be given to the buyers of the vehicles to encourage them to scrap their vehicles.

Under the policy, the exemption in the Motor Vehicles Tax shall be available to the extent of 10 per cent of the Motor Vehicle Tax chargeable or 50 per cent of the scrapped value as mentioned in the certificate of deposit, whichever is lower.

The registration fee rebate will be given to the extent of 25 per cent on the registration of a new vehicle purchased on the basis of the certificate of deposit.

After the critical age, a higher fitness fee will be charged on the vehicles as per the Central Motor Vehicles Rules.

Environment compensation charge and road risk charge will be charged at the rate of Re 1 per CC of the vehicle at the time of its fitness testing for vehicles which have completed critical age, respectively.

All other transport services like transfer, hypothecation alteration, non-objection certificate (NOC), etc., shall be extended to the vehicles of critical age at a fee rate of Rs 100 more than the fee rate for vehicles other than that of the critical age.