Voluntary Vehicle Fleet Modernization Programme (VVMP)

Background & Purpose

• India faces the dual challenge of pollution and road safety due to the large number of old, unfit vehicles still running.
• The VVMP was launched to create an ecosystem for phasing out such vehicles.
• Key mechanisms:
  • Automated Testing Stations (ATSs) → scientific and transparent fitness testing.
  • Registered Vehicle Scrapping Facilities (RVSFs) → safe and eco-friendly scrapping.

📌 Target: Scrapping around 1 crore unfit vehicles, not based on age, but strictly on their fitness condition.

Objectives

1. Pollution Control → Reduce vehicular emissions by 15–20%.
2. Safety & Economy → Fewer breakdowns, fewer accidents, better fuel efficiency, lower maintenance costs, and boost to auto sales & jobs.
3. Circular Economy → Shift the current informal scrappage practices into a formal industry, ensuring recycling and reuse.
4. Industrial Growth → Supply low-cost raw materials (steel, plastics, electronics) to key sectors.

Salient Features

(a) Certificate of Deposit (CoD)

• When a vehicle fails the fitness test and is scrapped at an RVSF, the owner gets a CoD.
• This certificate is like a reward token: it can be used to avail discounts on new vehicle purchases.

(b) Automated Testing Stations (ATSs)

• Aim is to minimize manual interference in fitness checks.
• Phase 1: 75 ATSs to be set up.
• Scale-up: 450–500 ATSs across India.
• PPP Model: Encourages private investment with State Government partnership.

(c) Registered Vehicle Scrapping Facilities (RVSFs)

• These will ensure scrapping is environmentally safe and technologically advanced.
• India’s current recovery from scrapped vehicles is ~75%, compared to 90% global benchmark.
• Plan: Establish 50–70 RVSFs across India in next 4–5 years.

Incentive–Disincentive Strategy

This is the heart of the programme. To encourage people to voluntarily scrap vehicles, carrots and sticks are both used:

(i) Incentives

• Scrap Value: 4–6% of ex-showroom price, paid by scrapping centre.
• Motor Vehicle Tax Concession: States advised to give up to 25% rebate for private vehicles, 15% for commercial vehicles.
• Registration Fee Waiver: No fee for new vehicle if CoD is presented.
• OEM Discount: Auto manufacturers advised to give 5% discount on new purchases with CoD.

(ii) Disincentives

• Higher Fitness Test Fees: More charges for fitness tests of old commercial vehicles (>15 years).
• Higher Re-registration Fees: Increased costs for private vehicles over 15 years old.

Rules for Commercial vs Private Vehicles

• Commercial Vehicles (CVs)
  • Registration linked to fitness validity.
  • Fitness test every 2 years for first 8 years, then annually.
• Private Vehicles (PVs)
  • Registration valid for 15 years.
  • After that, need a fitness certificate valid for 5 years.

End-of-Life Vehicle (ELV) Declaration

• If a vehicle fails the ATS fitness test, it can go for one re-test after repairs.
• If it fails again, or fails Appellate Authority’s re-inspection, it is declared an End-of-Life Vehicle (ELV) → must be scrapped.

Discounts Offered (OEM-linked)

• Commercial Vehicles:
  • 3% of ex-showroom price (for cargo vehicles >3.5 tonnes).
  • 1.5% (for cargo vehicles <3.5 tonnes).
  • Condition: Vehicle scrapped within last 6 months.
  • Discount period: 2 years.
• Passenger Vehicles (cars):
  • 1.5% of ex-showroom price OR ₹20,000 (whichever lower).
  • Must be scrapped within last 6 months.
  • Linked to Vahan database.
  • Discount period: 1 year.

Big Picture

The VVMP is a multi-dimensional reform:

• It improves air quality by phasing out polluting vehicles.
• It improves road safety by removing unfit vehicles.
• It gives a boost to industry and economy through demand for new vehicles and supply of recycled materials.
• It promotes a circular economy by formalizing scrappage.

📌 In UPSC terms: This programme is an example of environmental sustainability + industrial growth + public safety coming together through a policy incentive-disincentive framework.