Govt Launches Vehicle Scrapping Policy to Phase Out Unfit, Polluting Vehicles

New Delhi: The Ministry of Road Transport and Highways has officially launched the Voluntary Vehicle Modernization Program, also known as the Vehicle Scrapping Policy, aimed at phasing out old, polluting vehicles across India. The program aims to create an ecosystem for scrapping unfit vehicles through a nationwide network of Registered Vehicle Scrapping Facilities (RVSFs) and Automated Testing Stations (ATSs). Currently, over 60 RVSFs are operational across 17 states and union territories, along with 75 ATSs in 12 states, with many more in development.

The policy’s launch was marked by a high-level meeting between Union Minister for Road Transport & Highways Nitin Gadkari and a delegation of CEOs from the Society of Indian Automobile Manufacturers (SIAM) at Bharat Mandapam on Tuesday. Ministers of State Harsh Malhotra and Ajay Tamta were also in attendance. The discussion focused on encouraging the scrapping of outdated commercial and passenger vehicles and replacing them with newer, less polluting models.

Recognizing the importance of fleet modernization and promoting a circular economy, several commercial and passenger vehicle manufacturers have committed to offering discounts for a limited period against a Certificate of Deposit (Scrappage Certificate). Commercial vehicle manufacturers will offer discounts for two years, while passenger vehicle manufacturers will offer discounts for one year. These incentives aim to encourage owners to scrap End-of-Life Vehicles, ensuring safer, cleaner, and more efficient vehicles on Indian roads.

Discounts for Commercial Vehicles

Major commercial vehicle manufacturers, including Tata Motors, Volvo Eicher Commercial Vehicles, Ashok Leyland, Mahindra & Mahindra, Force Motors, Isuzu Motors, and SML Isuzu, have agreed to offer discounts as part of the scrapping initiative:

• 3% of the ex-showroom price for a commercial cargo vehicle over 3.5 tonnes Gross Vehicle Weight (GVW) scrapped within the last six months.
• 1.5% of the ex-showroom price for a commercial cargo vehicle under 3.5 tonnes GVW scrapped within the last six months.

In addition, a discount of 2.75% of the ex-showroom price will be offered for those purchasing a vehicle using a traded Certificate of Deposit for scrapping a vehicle over 3.5 tonnes GVW, and 1.25% for vehicles under 3.5 tonnes. The scheme may also apply to buses and vans.

Discounts for Passenger Vehicles

Passenger vehicle manufacturers, including Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Hyundai, Kia, Toyota, Honda, JSW MG, Renault, Nissan, and Skoda Volkswagen, will provide discounts of 1.5% of the ex-showroom price or Rs 20,000, whichever is lower, for cars scrapped within the last six months. Companies may also offer additional discounts on selected models, and details of scrapped vehicles will be linked to the Vahan system.

Mercedes Benz India has announced a flat discount of Rs 25,000, which will be added on top of existing discounts.

Additional Incentives

These manufacturer-offered discounts come in addition to the scrap value provided by RVSFs. Other incentives include motor vehicle tax concessions, waiver of fees for new registration certificates, and waivers of government liabilities under the Vehicle Scrapping Policy, linked to the Certificate of Deposit. These incentives are available in various states across the country.

The Vehicle Scrapping Policy is a major step towards reducing vehicular pollution, improving road safety, and promoting a more sustainable automotive industry by encouraging the replacement of older vehicles with modern, eco-friendly alternatives.