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Vehicle Scrapping Policy: All You Had To Know About It


With each passing day, the earth is becoming a depo to millions and thousands of germs, bacteria, viruses, and others. What is the reason behind this degradation? The earth, which was once completely pure and was the only planet capable to sustain life, is facing sheer threats in recent times, so much so that scientists are looking for other planets where life can be supported. From ozone holes to the melting of polar ice caps to the rising of the average overall temperature of the earth, greenhouse gases are the reasons behind this deterioration. The causes for the natural calamity also owe to some extent to the excessive use of fossil fuels and their non-appropriate disposal. This constant usage of excessive chemicals, fuels, and not recycling them properly is contributing to this approaching disaster. 

To cope up with this, every country has come up with some sort of plan or other. Vehicle scrappage policy is one such policy adopted by India under the leadership of Prime Minister Narendra Modi, which was a much-awaited project by all Indians. The main aim of this project is to dump out all the used, old, unfit, and non-functional vehicles and automobiles in an eco-friendly way. 

According to Prime Minister, Narendra Modi, this policy will help to maintain the consumption in a regular way, and will also provide a new identity to the automobile industry and the sector, which will also promote the creation of a circular economy and enhance the economic system of India, helping it to achieve an economic development from its stage of being an underdeveloped economy. Also, as this policy aims to be environment-friendly, it will also see after the excess fuel consumption and its wastage. 

The main aim of this policy is to pick out and get rid of or if possible, repair the old vehicles, which are not of any help but only pollute the atmosphere. Automobiles, after their constant usage, become dysfunctional and emits a lot of greenhouse gases. These vehicles then, instead of providing service become a major source of inconvenience. The policy is designed to act by creating an infrastructure that will examine all the unfit vehicles and get an automated test done for them all after they have completed their registration period. 

Now, according to the automobile rules, the registration period remains valid for 15 years from the issue date of the vehicle. In the case of commercial vehicles, the time period gets an extension of 5 years and the total period becomes 15 years. 


The policy will come into action once this registration period is over, which is 10 and 15 years, accordingly, after which, the vehicles have to undergo a mandatory taste and screening to see their fitness scale. Also, according to the motor vehicle law, every vehicle has to get a fitness certificate renewed every year after eight years of its issue. During the first eight years, this renewal needs to be after every two years. 

How Will This Policy Be Executed?

This policy has made strict laws regarding the scrapping of unfit vehicles. Commercial vehicles which are more than 15 years old and private vehicles of more than 20 years old must be scrapped off and destroyed. Now, testing all the vehicles and scrapping them off in an eco-friendly manner is a huge process. For this, the entire policy has been broken down into steps. 

First comes the testing of the vehicles, to decide which all vehicles are unfit and need to be removed immediately. These vehicles will go for their test at the Automated Fitness Center, and the scales of this fitness test are based on international standards. 

The parts to be tested for includes the braking system, safety and gear components, fuel emission parts, and their test. Automobiles that will fail in any one of these, will be considered unfit and be disintegrated. These rules thus, will be applicable and put into effect from October 1, 2021. The scrapping down and disintegration will come into effect from 1st April 2022. This is meant for all the government vehicles and PSUs that are 15 years old and for all the heavy vehicles, this rule will be applicable from 1st April 2023.  In the case of private cars and commercial ones and all the other categories, this test is made to be mandatory from 1st June 2024, in a phased way. 

Why is this Policy Important?

This policy is important on so many different levels. From an industrial perspective, this policy is going to solve a huge chunk of the unemployment problem. From an environmental view, this is going to help control the pollution level. And from the economic way, this policy is going to boost economic development. 

In a recent study, it has been seen, that India currently holds nearly 51 lakh light motor vehicles, 34 lakhs more than 15-year-old vehicles, 17 lakhs heavy commercial vehicles, and others. These commercial vehicles do not have any test performed and they are still in operation without the required ‘Fitness Certificate’.


Thus, these vehicles emit more than 10 to 12 times of the pollution any normal, fit vehicles would emit, which poses a major threat as the growing global temperature rises from global warming. By scrapping down these dysfunctional vehicles, it is possible to reduce the pollution level to a huge extent. And as ‘little drops make the mighty ocean’, by cutting down pollution in a systemic way all over the world, it is possible to stop global warming and bring back the normal atmospheric temperature of the earth.

Benefits of the Vehicle Scrapping Policy

As per the vehicle scrapping policy, it is decided that the vehicle owners are going to get a discount of 4-6% while buying a new model on the total price. Besides this, the state government is asked to give a rebate of 25% on personal vehicles and 15% on heavy commercial ones. Also, vehicle manufacturers are supposed to give a 5% discount to the people who will make the ‘Scrapping Certificate’, and for all, they do not have to pay any registration fee while buying a new vehicle. 

Another major benefit of this policy is employment. When this policy will start taking its shape, it is going to reduce the production cost of the manufacturers and the cost of the scrap materials will also decrease. This, in turn, will provide employment to a huge lot, at an estimated 3 crores 70 lakh people in the automobile industry. In the fitness testing centers, nearly or even more than 35 thousand people are going to gain employment, and the government is all set to invest Rs. 10,000 crores for this policy. After the collection of GST, the government is going to get nearly Rs. 30,000 to Rs. 40,000 crores from taxes.

These scrapping centers are going to be set up in the industrial ones and none in any residential areas. Also, permission is required from the state transport department in order to scarped down the vehicles and the owner of the center needs to make an earnest money deposit (EMD), which is set at Rs. 10 lakhs to Rs. 1 crore, to the respective state government. 

Pros of the Policy-

        The main motive of this policy is to boost the economy and as it can be seen, this is a new incentive to buy new vehicles. As it becomes mandatory to produce a fitness certificate each year after eight years, and on not getting a certificate, you need to scrape down the vehicle, this will definitely make the people eager to buy a new vehicle, which in turn will level up the economy.

        This policy is also going to control the pollution level to a huge extent and help in recycling the old parts in an environment-friendly way.

        The vehicle scrapping policy is a treasure island for all the unemployed people as this policy is going to create a golden opportunity for the job seekers and provide employment to crores and lakhs of people.

        This policy is a master plan for the share market as it is going to act as a boon for all the stakeholders, and a miracle for the Indian automobile industry. 

Cons of the Policy-

As every policy comes with both benefits and disadvantages, the vehicle scrapping policy is not an exception. Amidst this pandemic situation, this was not the right time to execute this plan as trucks and other heavy vehicles are in utmost demand. Scrapping off the old trucks will put other trucks under immense pressure and inevitably, slow the rate of work function. Also, this policy is time-consuming and not easy to execute. Moreover, India is an underdeveloped country, consisting majority of people living under the poverty line. Taking away their trucks, will not going to compensate them with a new one which will solve their poverty problem, but rather strip off their only source of income.

Thus, the Vehicle Scrapping Policy is a very good initiative if seen from a broader perspective and has numerous advantages. But if we look deeper and closer, it is going to devastate the poverty-stricken people of India. 

Bryony Jones
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