Policy

What is Vehicle Scrappage Policy in India?

The Vehicle Scrappage Policy is a government-backed initiative designed to remove old, unfit, and polluting vehicles from Indian roads. Its main objective is to build a structured system for phasing out such vehicles and replacing them with modern, cleaner, and more efficient ones, ultimately helping reduce the nation’s overall carbon footprint.

Highlights of the Vehicle Scrappage Policy Announcement

The Indian automobile industry entered a difficult phase in the second half of 2019, and the COVID-19 pandemic worsened the slowdown. While sales improved slightly after Diwali in 2020, the sector is still struggling. The Scrappage Policy is likely to help by encouraging people to replace old, unfit vehicles with newer models. This not only increases vehicle demand but also reduces pollution, benefiting the environment.

Here’s a list of key highlights related to the Vehicle Scrappage Policy announcement.

• The policy aims to establish a structured system for scrapping unfit vehicles across India..
• Detailed rules and procedures for the scrapping process will be introduced by the Ministry of Road Transport and Highways.(MoRTH).
• Vehicle owners will receive certain incentives for voluntarily scrapping their old vehicles.
• Phasing out unfit vehicles is expected to help significantly reduce air pollution, depending on the region.
• The policy is likely to encourage people to invest in safer, cleaner, and more advanced vehicles.

What is the aim of Vehicle Scrappage Policy 2021?

The primary aim of the Vehicle Scrappage Policy 2021 is to identify and phase out old, unfit, and polluting vehicles. Below are the major highlights of the scheme:

• Lower pollution levels by removing vehicles that lack valid fitness certification or registration.
• Enhance passenger safety, road safety, and overall vehicle standards.
• Create new job opportunities within the automobile and recycling sectors.
• Bring structure and regulation to the currently unorganized vehicle scrappage market.
• Help vehicle owners benefit from better fuel efficiency and reduced maintenance costs.
• Boost the supply of affordable raw materials for the automotive, steel, and electronics industries.

Benefits of the Vehicle Scrappage Policy

Here’s a list of potential benefits of the new vehicle scrap policy for the economy, automobile sector, vehicle owners, and others.

• Removing unfit vehicles from the roads will help improve air quality.
• As outdated vehicles are phased out, demand for new vehicles is expected to rise. Currently, more than 51 lakh light motor vehicles in India are over 20 years old.
• The automobile sector will see growth, generating employment—especially with the establishment of new vehicle scrapping centres.
• Modern vehicles offer enhanced safety standards, including advanced safety features that older models lack.
• The recycling industry will gain momentum, contributing to increased revenue and better material recovery.
• Vehicle owners may receive tax incentives for scrapping their old vehicles.
• Owners can also earn a good price for recyclable components such as tyres and other workable parts.

What Happens to the Car at the Scrapping Facility?

At the scrapping facility, the vehicle is fully dismantled and its parts are carefully separated. All fluids—including fuel, engine oil, and brake fluid—are safely drained.

Next, components such as tyres, wheels, and the battery are removed. Serviceable units like the infotainment system, engine, alternator, transmission, and other mechanical or electronic assemblies may be refurbished and resold.

The process is labour-intensive, but when done correctly, it significantly boosts the scrapping centre’s profitability. Once most components are removed, the remaining parts undergo further processing. Intact items like pipes, the AC unit, and the heater core can also be salvaged. Plastic and glass parts are extracted, and the paint is stripped off. Finally, the vehicle shell is crushed, shredded, and recycled into new metal.