Govt: Auto firms to be fined up to Rs 1 crore on mandatory recall orders for defective vehicles

Union minister Nitin Gadkari is likely to give statements to both Houses of Parliament on Thursday, formally informing about the contours of the vehicle scrapping policy, which was announced in this year’s Budget.

Under the policy, old vehicles are to undergo mandatory fitness tests in automated fitness centres to be set up across India. Failing the test, the vehicles are to be scrapped.

The policy is expected to give boost to automobile manufacturing industry as well as slowly weed out older vehicle fleet in India. Commercial vehicles are to be scrapped after 15 years, while personal vehicles older than 20 years will fall in the ambit of scrapping.

Automobile majors will have to shell out up to Rs 1 crore as penalty in case of mandatory recall orders by the government for defects in manufacturing from April 1, 2021, Ministry of Road Transport and Highways said on Wednesday. The ministry has issued rules for mandatory recall of defective vehicles by manufacturers. “It is notified that, where minimum number of complaints for particular category of vehicle against total sales of model is received on vehicle recall portal, mandatory recall is initiated,” the ministry said.

The notification mentions fines ranging from Rs 10 lakh to Rs 1 crore on the basis of number of vehicles and types of vehicles.