AUTO PUNDITZ
  • Team Auto Punditz

Everything you need to know about VEHICLE SCRAPPAGE POLICY.

As part of Vehicle Scrappage Policy, waiver on registration fee and up to 25% rebate on road tax could be offered says, Mr.Nitin Gadkari.


Mr.Nitin Gadkari, Union Transport Minister, while presenting an outline of the upcoming vehicle scrappage policy, in the Lok Sabha has mentioned a host of incentives to the owner who scraps his/her old vehicle.

The new policy is expected to be notified in a month or so. So, until then don't give ear to unwanted rumors.

The three-strong incentives that are proposed are :

  • 25% rebate on road tax for personal use vehicles and 15% rebate for commercial vehicles.

  • 5% discount on new vehicle purchase against scrapping certificate.

  • 4-6% of scrap value too could be offered to the owner of the scrapped vehicle.

The above is to encourage owners to scrap the vehicles instead of going in for a fitness test and renewal of registration, at the end of the vehicle’s life (20 years for a personal vehicle and 15 years for a commercial vehicle).


The policy aims to substantially reduce the old and defective population on the roads. These old vehicles can possibly cause pollution that is 10 -12 times more than that of the fit vehicles. They may not be road-worthy too.

It is estimated that there are more than 51 Lakh Light Motor Vehicles which are more than 20 years old; and a further 34 Lakh Light Motor Vehicles which are more than 15 years old. 17 Lakh Medium and Heavy Vehicles of more than 15 Years; and not meeting the fitness norms are also there on records

Top 4 Benefits of the Policy

  • This could significantly reduce the pollution on the roads while generating a lot of replacement demand for the Automobile Sector.

  • This will have a cascading effect on the other dependant industries including steel, aluminum, tire, electronics, accessory, parts, fuel, etc.

  • It could also generate a lot of interest for the present and new players to increase their capacities; all leading to greater employment opportunities.

  • An estimated additional investment of Rs 10000 leading to an additional of 35000 direct jobs could be created after the scrappage policy is implemented effectively.


IF you still want to continue to drive/ride a vehicle [which is due for scrapping]

Tougher fitness certificate norms.

The criteria to be met in the Fitness test would be:

  • Emission Norms

  • Braking efficiency

  • Safety norms

And other criteria as per CMV Rules,1989.

- Increased and regular fees for conducting and achieving fitness test norms could also be a strong disincentive to continue with older vehicles.


Other Government Initiatives

All the vehicles with Central Govt/ State Government/ Sub State level including District, Panchayat, etc./ Quasi-Government agencies/PSU's and other departments with Governments have been asked to prepare a list of vehicles that can be scrapped by April 2022; and further course of action will be undertaken accordingly and urgently.


Additional Information

The 25% rebate on road tax to be offered will be under the purview of the state governments, who will be encouraged to do the same. Registration fees too could be waived off, it is suggested.


Registered Vehicle Scrapping Facility, across public and private domains, would be set up to facilitate Old Vehicle Scrappage.


Also, Automated Fitness centers on a PPP model too will be set up by the Government agencies.


To avoid conflict of interest, these centers would only offer Fitness Test and there would be no facilities for refurbishment or reengineering of the older vehicles.

The Time Lines fixed for the Old Vehicle Scrappage Policy are :

  • Define rules for Fitness and Scrapping Centres by 01 Oct 2021.

  • Scrapping Govt and PSU vehicles by 01 April 2022

  • Mandatory Fitness Testing of HCV's by 01 April 2023

  • Mandatory Fitness Testing of other Category of vehicles by 01 June 2024

“The objectives of the policy are to reduce the population of old and defective vehicles, achieve a reduction in vehicular air pollutants to fulfill India’s climate commitments, improve road and vehicular safety, achieve better fuel efficiency, formalize the currently informal vehicle scrapping industry and boost the availability of low-cost raw materials for automotive, steel and electronics industry,” Gadkari said.