Odisha accelerates old vehicle scrapping drive amid delays, incentive concerns

Odisha government has announced plans to scrap vehicles that are over 15 years old, aiming to reduce pollution and modernise the vehicle fleet. The initiative will first target government vehicles, followed by private vehicles. Experts have, however, expressed concerns that the policy may not achieve its intended success if adequate incentives are not provided.

The government’s focus is to ensure that by October 15, all old government vehicles are removed, after which private vehicle owners will be encouraged to follow suit. The scrapping policy comes with provisions for special incentives to purchase new vehicles.

Despite these plans, government-run vehicles that are over 15 years old have not yet been fully removed. According to official records, as of March 31, a total of 4,351 government vehicles have already been scrapped, but another 5,000 vehicles over 15 years old are yet to be scrapped. The Transport Department has expressed its commitment to ensuring the smooth implementation of the policy.

The government has issued a letter to all department secretaries, including the Additional Chief Secretary, directing that all old vehicles be removed by October 15. Under the scheme for the financial year 2025-26, the central government has announced special financial assistance for vehicle scrapping.

According to the guidelines, if up to 500 vehicles are scrapped, a Rs 50,000 incentive will be provided per vehicle. If between 501 and 1,000 vehicles are scrapped, Rs 60,000 will be provided per vehicle. If between 4,000 and 6,000 vehicles are scrapped, Rs 1,20,000 will be provided per vehicle.

The government has now decided to replace all old vehicles with new ones. The Transport Minister stated that under the scheme, the Central government has allocated Rs 600 crore to the state government for this purpose.

"The Central government had allocated Rs 600 crore to the state government. As per the policy, we had also informed all the departments.  As many as 9,727 vehicles were auctioned till August 31. As many as 4,421 vehicles have been scrapped. The department has issued guidelines to accelerate the process of scrapping the old vehicles," said Odisha Transport Minister Bibhuti Bhusan Jena.

Now, a question has been raised on why there has been a delay in the removal of old vehicles despite central incentives and the state governments’ special rules. Current data shows that the Housing Department has the highest number of vehicles over 15 years old, totalling 1,189. The Housing and Urban Development Department has 426 old vehicles, while the Health Department has 378.

Odisha’s Motor Vehicle Registration and Scrapping Policy came into effect in 2022. However, road safety officials have stated that without proper incentive arrangements for private vehicles, it is difficult to encourage private vehicle owners to participate in scrapping programs.

"As per the provision of the Central government, a private vehicle owner will get fewer incentives. As a result, the private vehicle owners are not thinking of scrapping their old vehicles. Initiative should be taken to provide interest-free loans from the banks for the persons who want to buy new vehicles. As the person is supporting the Central government and taking part in the drive to alleviate environmental pollution, he should be encouraged," said road safety expert Subrat Nanda.

Khordha district’s Kumharbasta and Jajpur district’s Jenapur areas have seen the opening of two vehicle scrapping centres for old vehicles. Now, it has been decided that another vehicle scrapping centre will be set up in Rourkela soon to further facilitate the program.

Around 10,000 old vehicles, including both private and government-owned vehicles, have been scrapped so far. Vehicle owners receive a certificate of deposit upon scrapping their old vehicles. This certificate can be submitted during the registration of a new vehicle to avail government incentives.

While commercial vehicles are eligible for a 15% rebate up to eight years, private vehicle owners can avail a 25% rebate. Additionally, vehicle manufacturers are offering a 5% discount on the price of new vehicles.