India’s vehicle scrappage policy: 10 key points detailed by Union Minister Nitin Gadkari


At the Union Budget 2021-2022 announcement, one of the biggest talking points from Finance Minister Nirmala Sitharaman’s speech was the official announcement of a vehicle scrappage policy in India. For long, authorities have mentioned that a scrappage policy is in the works, and it was finally confirmed during the Budget announcement at the start of February. Now, Union Minister for Road Transport and Highways, Nitin Gadkari, has shed light on the highlights of the policy, which is expected to be revealed in full in the coming days. Here is a look at the key takeaways.

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  1. Under India’s voluntary vehicle scrappage policy, private vehicles – which are over 20 years old – will have to undergo fitness tests. Commercial vehicles that are over 15 years old will also have to face these tests.
  2. Fully automated fitness test facilities will be set up on a public-private partnership (PPP) basis involving private firms and state governments. The automated tests will allow no scope for human intervention or fudging of results.
  3. Those who choose to drive a vehicle that has failed the automated test will face substantial penalties, and such vehicles could also be impounded.
  4. Additionally, even vehicles older than 8 years that pass the automated tests will be subjected to a ‘green tax’, which will see owners shell out an additional 10 percent to 25 percent of road tax at the time of the renewal of the vehicle’s fitness certificate. 
  5. Those who opt for the voluntary scrappage scheme and have their old vehicle scrapped, will be eligible for benefits and incentives as part of the policy when they purchase a new vehicle.
  6. The vehicle scrappage policy has been devised to promote sales of new vehicles with improved fuel efficiency and low pollution levels, as well as to slash India’s Rs 10 lakh crore expenditure on crude imports.
  7. Around 1 crore aging vehicles are set to be scrapped once the policy is implemented, according to Gadkari.
  8. Gadkari said the new policy will boost the Indian automotive industry’s turnover by 30 percent to Rs 10 lakh crore in the coming years.
  9. As a direct result of the policy being put in place, up to 50,000 jobs and investments of around Rs 10,000 crore are expected to be generated.
  10. Gadkari added that India’s automotive sector will be amongst those offering the highest employment opportunities in the country going forward.
Times2 Desk
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