PM Narendra Modi launches vehicle scrapping policy- Here is all you need to know

New Delhi: Prime Minister announced setting up of the Vehicle Scrapping Policy via video conferencing on Friday at Investor Summit in Gujarat. The summit was aimed at inviting investment to set up infrastructure for the Voluntary Vehicle-Fleet Modernization Program.

The Prime Minister said that the summit opens a new range of possibilities and requested the youth and start-ups to join this programme. “The scrappage policy will provide a new identity to the country’s auto sector. It will play a huge role in removing unfit vehicles from roads, and bring a positive change in all sectors and not just the auto sector,” said the Prime Minister at the event in Gujarat.

“We’re about to enter the 75th year of Independence. The next 25 years are very important for the country, from this point onward. In these 25 years, changes are going to take place in our way of working, in our daily lives, in our businesses,” said PM Modi.

The Prime Minister in his address also drew parallels between the lifestyle of the citizens of India and the economy of the country. He believes that this policy will deeply benefit the middle class. “The manner in which technology is changing, be it our lifestyle or our economy – there will be a lot of changes in both of them. Amid these changes, it is also important to protect our environment, our land, our resources, our raw material,” PM Narendra Modi added.

While emphasising the need for sustainable development, PM Modi stated that technology and innovation are the future. “The effort is to make development a sustainable one, an environment-friendly one. We are experiencing the challenges of climate change. So, in the interest of its citizens, India has to take major steps,” PM Modi added.


The Vehicle Scrapping Policy is aimed at creating an eco-system for phasing out unfit and polluting vehicles in an environmentally friendly and safe manner. The policy intends to create scrapping infrastructure in the form of Automated Testing Stations and Registered Vehicle Scrapping Facilities across the country.

The Investors Summit is being organized to invite investment for setting up vehicle scrapping infrastructure under the Voluntary Vehicle-Fleet Modernization Program or the Vehicle Scrapping Policy, said Prime Minister’s Office (PMO) in a statement. The Summit is being organized by the Ministry of Road Transport and Highways and the government of Gujarat.


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. In India, most of the vehicles are on run currently polluting the environment or are lying at road sides.

Nitin Gadkari said that once the registration of the vehicles is over, they can either go for mandatory fitness test or the scrapping option. Each fitness test will set you back by at least Rs 30,000-40,000 and a green cess will also be levied while renewing the vehicle registration. Centre hopes that all these additional costs will dissuade vehicle owners from retaining the vehicle.


The Vehicle Scrapping ecosystem is expected to generate 35,000 jobs and attract Rs. 10,000 crore of investment, said Road Transport & Highways Secretary Giridhar Aramane.

He added that the policy will be implemented from 2023 onwards for heavy commercial vehicles and from June 2024 for for personal vehicles.


The vehicle scrapping policy will provide incentives for purchase of new vehicle against scrapping certificates of old vehicle like road tax rebate of upto 25%, waiver of registration fee and no registration fee upon presentation of a certificate given after scrapping the old vehicle. 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. Vehicle manufacturers will be advised to give 5% discount on new vehicles against a scrapping certificate.