Govt announces vehicle scrappage policy: All you need to know

Published on Mar 18, 2021 08:10 PM IST

The rules for fitness tests and scrapping centres are likely to be notified by October 1 of this year.

Union transport minister Nitin Gadkari.
Union transport minister Nitin Gadkari.
By | Written by Shivani, Hindustan Times, New Delhi

The central government on Thursday announced the long-awaited vehicle scrappage policy, which was announced by the finance minister Nirmala Sitharaman in her budget speech. Calling the policy a "win-win" for everyone, Union transport minister Nitin Gadkari said that it will reduce pollution and increase road safety.

As per the new policy, in case of failure to get a fitness certificate, commercial vehicles will be de-registered after 15 years, said Gadkari. Private vehicles will be de-registered after 20 years if found unfit or in case of a failure to renew registration certificates, he added.


The policy is touted as a major step to boost the Indian automobile sector, reeling under the adverse impact of the Covid-19 pandemic. Once it is implemented, the scrappage policy will make India the world's largest automobile hub in the next five years, Gadkari stated in Parliament.

The rules for fitness tests and scrapping centres are likely to be notified by October 1 of this year.

On February 1, the Union finance minister announced a vehicle scrapping policy in an attempt to give a boost to the automobile manufacturing sector and lower carbon emissions.

Here is all you need to know about the policy:

1) Personal vehicles will be required to undergo a fitness test at government-certified fitness centres. Owners can scrap their vehicles anywhere in the country irrespective of their registration place.

2) The policy will not be applicable on vintage cars.

3) Appointment for fitness centres may be booked online, according to the new guidelines. Test reports will be generated in an electronic mode.

4) In case of failure to obtain fitness certification or found unfit, vehicles will be de-registered.

5) The government also proposed that all vehicles of the central government, state government, municipal corporation, panchayats, state transport undertakings, public sector undertakings and autonomous bodies with the Union and state governments may be de-registered and scrapped after 15 years from the date of registration. The tentative date for scrappage of government and PSUs vehicles above 15 years of age is April 1, 2022.

6) The owners will be provided with a scrapping certificate after which they will be eligible for the incentives proposed under the scheme.

7) The incentives include scrap value for the old vehicle, which will be approximately 4-6% of the ex-showroom price of a new vehicle.

8) The state governments may be advised to offer a road-tax rebate of up to 25% for personal vehicles and up to 15% for commercial vehicles.

9) The vehicle manufacturers are also advised for providing a discount of 5% on the purchase of a new vehicle.

10) The registration fees may also be waived for the purchase of a new vehicle.

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