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Vehicle Scrappage Policy of India


Vehicle scrappage policy of India was first presented by Finance Minister Nirmala Sitharaman at the Union Budget 2021.

Vehicles have become an integral part of human life. In the family of four, there are 3-4 vehicles (bike/car). It is a symbol of status for some, but an eating vulture of the environment.

The major part of the cause of the pollution is the vehicles plying on the road. Even after the CNG came into existence, there is not much sloping down in pollution because many people are not interested in taking the advantage of CNG.

Another reason why vehicles are a cause of damaging environment is the body of the vehicle. People are not aware about the harmful effect of the careless disposal of the vehicle.

The burning down of the vehicle or burrowing the parts is not the solution for a damaged car. To encourage shift towards electric vehicles and to curb the rising pollution, the Indian Government brought in the Vehicle Scrappage Policy. It has been said that the policy will come into existence in the year 2022.

What is Vehicle Scrappage Policy of India?

The vehicle scrappage policy was launched by Prime Minister Shri. Narendra Modi at the Investor Summit, Gujarat. The policy aims at tracing out the old cars in an appropriate way.

Since the country lacks a proper way to follow when it comes to disgrading old and unfit cars, the policy will be an aid to solve the issue.

To understand it more, the old cars will go under the fitting tests. If the car is unfit and the buyer scraps out his car and does not sell it further, he will contribute to a better environment.

The new vehicle scrappage explains that if your vehicle is older than 15 years in the case of personal vehicles and 10 years in the case of commercial vehicles will be scrapped.

After completion of the limits, vehicles will have to undergo a mandatory fitness test, which would determine if it is fit to run or not.

If the vehicle fails a fitness test, it will not get a renewal certificate and will not be able to ply on roads.

If a vehicle passes the fitness test, it will get a renewal certificate and would have to undergo a fitness test every five years.

Also Read: EV revolution in India – is India ready or not?

Why is it important?

The major importance of the vehicle scrappage policy of India is to clean the environment. The cleaning away of old cars will definitely decrease the air pollution.

Talking about the benefits of the buyer or consumer, they will get incentives and perks like the following:

  • They will get a certificate for scrapping the old car.
  • They will get a concession of 25% on road tax on new vehicles.
  • They will not have to pay registration fee for the new vehicle.
  • There will be discounts given by the manufacturers.
  • Road and Transport Ministry will make sure that the buyers get a 5% off discount from carmakers. It will only be available against the certificate issued by the government.
  • Employment is supposed to be increased as this scrapping needs labour. Around 35,000 jobs will be available. This will bring an investment of at least Rs. 10,000 crores to the table.
  • Saket Mehra, Partners Automotive sector leader of Grand Thorton Bharat recently stated “One of the key opportunities that will emerge from the vehicle scrappage policy will be for the metal recycling business. It will also to an extent reduce the cost of production. Steel is a crucial component for automobile manufacturers, and its price has been growing up to almost 30 per cent in the last six months.”

Just like a coin has two sides, this policy also has some disadvantages. For a man who belongs to the middle class, the cost of getting his car certified has increased 5 times.

The green tax has also increased and can be collected anywhere from 10 to 15%. The nominal certificate cost for cars are now 7,500 whereas for trucks are 12,500. The policy since is a boon to the environment and to humans, it is necessary to follow.

At the time of announcing the policy during the Union Budget 2021, Finance Minister Nirmala Sitharaman said the scrapping of old vehicles would result in more benefits than just reducing air pollution.

Recycling old vehicles will help in reusing key materials like steel, plastic and copper. This will result in reducing the cost of manufacturing.

Also Read: Nikol EV to set 5,000 EV charging stations

vehicle scrappage policy india 2021

vehicle scrappage policy india 2021

How to register for Vehicle Scrappage Certificate?

The registration is done after the certificate of fitness. If the vehicle is fit, the certificate is issued. The fee that is to be charged while the certification is as followed:

For Light Motor vehicle
-Rs 600 is the existing fees
-Rs 1,000 is automated testing and revised fees

Medium Goods/Passenger vehicle
-Rs 1,000 is the existing fees
-Rs 1,300 is the automated testing and revised fees    

Heavy Goods/Passenger vehicle
-Rs 1,000 is the existing fees
-Rs 1,500 is the automated testing and revised fees

Renewal of fitness certificate (for vehicles older than 15 years)

Light Motor vehicle
-Rs 200 is the existing fees
-Rs 7,500 is the revised fees 

Medium Goods/Passenger vehicle
-Rs 200 is the existing fees
-Rs 10,000 is the revised fees  

Heavy Goods/Passenger vehicle
-Rs 200 is the existing fees
-Rs 12,500 is the revised fees 


The vehicle scrappage policy of India has more benefits. For your as well as the benefit of the environment. While the policy is voluntary, it would require mandatory fitness tests for vehicles after certain duration.

If not renewed, get it done as soon as it is possible because Improvement always starts with ‘I’.

Also read: Subsidies on Electric Vehicles in India

Arjun D Pawar
Arjun is an engineer having 9+ years of corporate experience. Arjun is an author of Novel “Masters of Lygrenn”. He is passionate about business and loves reading & writing in his free time. Schedule meeting with me

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