VEHICLE SCRAPPAGE POLICY 2021

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By Sukanya Verma, Kalindi College

Prime Minister Narendra Modi on August 13, 2021, launched the much-awaited vehicle scrappage policy intending to phase out old and unfit vehicles in an environment-friendly manner. He also mentioned that this policy expects to bring investments worth around Rs. 10,000 crore. 

The Vehicle Scrappage Policy is a government funded program , initiated with the aim to replace old vehicles from the Indian roads. The implementation will begin on April 1, 2023 for heavy commercial vehicles and  June 1, 2024, for all other vehicles after undergoing mandatory fitness tests.

Eligibility for scrapping

The Vehicle Scrappage Policy will come into action after a vehicle’s registration period has expired. The private passenger vehicles have an approximate life-span of 15 years while the commercial vehicles have an approximate life-span of 10 years. After the passage of this period vehicles emit relatively more pollution as compared to the time when they were new .

What if the vehicle fails the fitness test?

If a vehicle fails the fitness test, it will be allowed to take two re-tests, failing which the vehicle will not be eligible to be issued a renewed registration certificate to operate. It is illegal to use/run an unregistered vehicle on the road.

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Image Credits: Google Images

Registration renewal and green tax Part of the Policy 

Automated fitness centers across the country will examine vehicles for emission of harmful gases and air-polluting particles, engine performance, brake tests, and similar more parameters. All vehicles passing the fitness test will be charged a green tax during registration renewal which can vary from state to state, fuel type and the type of vehicle. Greener vehicles like strong hybrids, EVs, and alternate-fuel models that use CNG, ethanol, and LPG will be exempted altogether from this.


The fees applicable for re-registration will also have to be paid by the owners. The government hopes that all these additional costs will discourage owners from holding on to their old vehicles after they are past their prime time. It is believed that this policy can reduce pollution, boost demand for new vehicles and create more job opportunities. Vehicle scrappage policies have already been launched by several countries including  US, Canada, Germany and China to boost their respective automatic industries and check vehicular pollution.

Incentives provided for eliminating old vehicles and buying new ones:

  • Vehicle manufacturers can give up to a 5% discount for buying new vehicles

  • Zero new registration fee

  • Scrap value being equal to 4-6% of the ex-showroom price of new vehicles.

  • States are allowed to give a rebate of 25% and 15% on road tax for personal and commercial vehicles respectively.

  • An increase in savings due to reduction in the maintenance costs and fuel-consumption.

Disincentives for keeping old vehicles:

  • States can levy an additional ‘Green Tax’

  • Hike seen by private vehicles in the renewal of registration fees.

  • Increase in renewal cost and additional procedures for  fitness certification in case of commercial vehicles

  • Automatic deregistration of unfit vehicles

Vehicles to be exempted:

  • Electric vehicles and Strong hybrids 

  • Vehicles using fuels such as LPG, ethanol, and CNG

  • Farm and agricultural implements such as tractors, tillers, and harvesters.

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