PM Modi Launches Vehicle Scrappage Policy


New Delhi: Prime Minister Narendra Modi on Friday launched the much-awaited vehicle scrappage policy at the Gujarat Investor Summit today.

During a virtual address at the Investor Summit in Gujarat, the Prime Minister said the launch of Vehicle Scrappage Policy today is a significant milestone in India’s development journey.

The vehicle scrappage policy will bring in investments of around Rs 10,000 crore. He also said that Alang in Gujarat can become hub for vehicle scrapping, the PM said.

The policy was first presented at the Union Budget 2021 by Finance minister Nirmala Sitharaman. Soon after, Union Minister for Road, Transport and Highways Nitin Gadkari revealed the details of the policy at a Lok Sabha session and notified the new vehicle scrappage policy.

While the new scrappage policy is voluntary, it would require mandatory fitness tests for vehicles after certain duration.


Much like the western countries, the scrappage policy comes into effect when a vehicle’s registration is complete. In general, a passenger vehicle has a life of 15 years and a commercial vehicle has a life of 10 years, after which they become obsolete and also starts polluting the environment at a greater intensity than they would have been doing earlier. In western countries, these old vehicles are sent to scrapyards where they are dismantled and the steel used for making the body is crushed and recycled again. In India though, there was no such policy. Most of the vehicles either are on run currently polluting the environment or are lying at roadsides.


No, not all vehicles will be scrapped as this is a voluntary scheme and not a mandatory one. However, there’s a catch here. All vehicles over and above the time limit will have to undergo mandatory fitness tests. If a vehicle fails fitness test, they will not get renewal certificate and won’t be able to run on the road. However, if they pass the fitness test, they will have to undergo a fitness test after every 5 years again to show their road worthiness.

Following financial benefits one can get from the policy-

1) A scrap value of the ex-showroom price of vehicle ranging from 4-6% will be given to the owner if they choose to scrap the vehicle

2) A rebate of upto 25% will be given in Road Tax

3) Vehicle manufacturers will be advised to give 5% discount on new vehicles against a scrapping certificate

4) No registration fees for vehicles.

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