Vehicle Scrapping Policy

News: Recently, the Union Road and Transport Minister announced the Vehicle Scrapping Policy in the Lok Sabha.It was first announced in the Union Budget for 2021-22.The policy is estimated to cover 51 lakh Light Motor Vehicles (LMVs) that are above 20 years of age and another 34 lakh LMVs above 15 years of age.India will also implement a Global Positioning System (GPS)-based toll collection system and do away with all toll booths within a year.


  • It aims at reducing the population of old and defective vehicles, bringing down vehicular air pollutants, improving road and vehicular safety.
  • Old vehicles will have to pass a fitness test before re-registrationand as per the policy government commercial vehicles more than 15 years old and private vehicles which are over 20 years old will be scrapped.
  • Old vehicles will be tested at the Automated Fitness Centerand the fitness test of the vehicles will be conducted according to international standards.
  • Emission test, braking system, safety components will be tested and the vehicles which fail in the fitness test will be scrapped.
  • The Ministry has also issued rules for registration procedure for scrapping facilities, their powers, and scrapping procedure to be followed.
  • The state governments may be advised to offer a road-tax rebateof up to 25% for personal vehicles and up to 15% for commercial vehicles to provide incentive to owners of old vehicles to scrap old and unfit vehicles
  • Vehicle manufacturers will also give a discount of 5%to people who will produce the ‘Scrapping Certificate’ and registration fees will be waived off on the purchase of a new vehicle.
  • As a disincentive, increased re-registration feeswould be applicable for vehicles 15 years or older from the initial date registration.


  • It will lead to creation for more scrap yards in the country and effective recovery of waste from old vehicles.In the new fitness centers, 35 thousand people will get employmentand an investment of Rs 10,000 crores will be pumped in.
  • This will boost sales of heavy and medium commercial vehiclesthat had been in the contraction zone as a result of economic slowdown triggered by the bankruptcy of IL&FS (Infrastructure Leasing & Financial Services) and Covid-19 pandemic.
  • The government treasury isexpected to get around Rs 30,000 to 40,000 crores of money through Goods and Services Tax (GST) from this policy.
  • Prices of auto components would fall substantially with the recycling of metal and plastic parts.
  • As scrapped materials will get cheaper the production cost of the vehicle manufacturers will also reduce.

It will help improve fuel efficiency and reduce pollution.As older vehicles pollute the environment 10 to 12 times more, and estimated that 17 lakh medium and heavy commercial vehicles are more than 15 years old.