Let’s delve into India’s Vehicle Scrappage Policy—its goals, key facilities, and incentives for vehicle owners—while exploring its impact on sustainable mobility and the automotive industry, writes Yashi Mittal, Head – Corporate Communications, Future Mobility Media.
As cities across India grapple with traffic congestion and rising pollution levels, the Government of India decided to take a bold step towards sustainable mobility. In 2021, the Ministry of Road Transport and Highways unveiled the Voluntary Vehicle Modernisation Program, more commonly known as the Vehicle Scrappage Policy. This policy marked the beginning of a new era, where outdated, polluting vehicles would be systematically phased out, making room for cleaner, greener, and safer alternatives.
A Nationwide Overhaul Imagine tens of thousands of vehicles, many well past their prime, still operating on Indian roads. These vehicles, often over 10 or 15 years old, are significant contributors to pollution, safety risks, and inefficiency. The Vehicle Scrappage Policy aims to change that narrative. With the introduction of over 60 Registered Vehicle Scrapping Facilities across 17 states and union territories, along with 75 Automated Testing Stations in 12 states, a robust infrastructure has been set in motion.
By April 2024, the policy had already made impressive strides—70,000 vehicles were voluntarily scrapped, and more are expected to follow as the program continues to expand.
The Backbone: Registered Vehicle Scrapping Facilities
At the heart of the Vehicle Scrappage Policy lies the Registered Vehicle Scrapping Facilities. These government approved centres serve as the final destination for End-of-Life Vehicles. But what makes this system revolutionary?
- Eligibility for Scrapping: The policy provides a clear framework. Vehicles that fail fitness tests, have not renewed their registration, have suffered significant damage, or are voluntarily offered by their owners, are eligible for scrapping. This also includes vehicles declared obsolete by government authorities.
- Depollution and Dismantling:The scrapping process isn’t just about crushing a car and calling it a day. It’s a meticulous procedure governed by Central Pollution Control Board guidelines. Hazardous materials such as batteries, oils, and fuel are carefully removed and disposed of, ensuring environmental safety at every step.
- Incentives Through Certificates: For vehicle owners, scrapping isn’t without its rewards. Once the vehicle is scrapped, owners receive a Certificate of Deposit and a Certificate of Vehicle Scrapping. These certificates are gold in the world of vehicle purchases—they entitle owners to benefits such as tax concessions, discounts on new vehicles, and registration fee waivers. The process is linked to the VAHAN database, ensuring that vehicle owners can seamlessly trade or redeem these certificates for new, eco-friendly cars.
- A Helping Hand from the Industry: Automakers are not just passive observers in this transformation. Eicher Trucks and Buses, a division of VE Commercial Vehicles, has launched a program offering financial incentives ranging from 1.25% to 3% of the base cost of new vehicles for customers with valid Certificates of Deposit. The move is designed to make the transition to cleaner vehicles financially viable for participants.
- Audits and Compliance: RVSFs are not left unchecked. Regular audits ensure that these facilities meet environmental standards and operational guidelines. They are required to maintain ISO certifications for quality, environmental management, and safety. Even cybersecurity certifications are mandatory, as these facilities access and manage sensitive vehicle data via the VAHAN system.
How to Locate an RVSF in Your Region?
Finding a Registered Vehicle Scrapping Facility near you is now easier than ever. To identify the closest RVSF, vehicle owners can visit https://vscrap.parivahan. gov.in/, where they can access state-wise service details, locations, and contact information. These websites not only provide the physical location of the scrapping facility but also offer detailed insights into the scrapping process, allowing you to initiate the necessary steps for scrapping your vehicle with ease.
Testing for the Future: Automated Testing Stations
While the scrapping facilities take care of vehicles at the end of their life cycle, the Automated Testing Stations ensure that vehicles on the road are roadworthy. These stations play a critical role in keeping India’s vehicle fleet safe and efficient.
How It Works: Vehicles undergo a rigorous fitness test that includes checks on brake efficiency, suspension, steering alignment, and emissions. The results of these tests determine whether a vehicle should continue plying the roads or if it has reached the end of its lifecycle and should be scrapped.
Private vs. Commercial: The policy makes a distinction between private and commercial vehicles. For commercial vehicles, fitness tests are mandatory after 15 years. Private vehicles undergo testing after 20 years. If they fail, they must be scrapped.
Data and Transparency: Once tested, the results are encrypted and uploaded to the VAHAN database. This ensures transparency and reduces any potential for human error or manipulation. ATSs are monitored through CCTV cameras, with records maintained for six months to ensure complete accountability.
Regular Audits: Much like RVSFs, ATSs undergo biannual audits to ensure they meet the prescribed standards. Issues identified during audits must be addressed promptly, often within ten working days. Surprise audits may also be conducted to ensure that facilities are maintaining the necessary standards.
State-Specific Incentives and Discounts
The success of the Vehicle Scrappage Policy relies heavily on the cooperation of state governments. To encourage vehicle, scrappage, several states have introduced their own concessions:
- Bihar, Madhya Pradesh, Uttar Pradesh, and other states are offering 10-25% discounts on new vehicle purchases, based on the scrap value or new vehicle price.
- Road Tax Rebates: Seventeen states provide a 15% concession on road tax for commercial vehicles, while 12 states offer a 25% rebate for private vehicle purchases following scrappage.
- Unique Offers: States like Haryana offer either a 10% concession or up to 50% of the scrap value, whichever is lower. Karnataka provides Rs 50,000 in tax rebates for vehicles priced over Rs 20 lakh, while Puducherry offers a 25% concession or Rs 11,000, whichever is lower.
Automakers’ Contributions: Driving Towards Sustainability
Automobile manufacturers have not just embraced the scrappage policy—they’ve turned it into an opportunity to push for sustainable production. Beyond offering discounts on new vehicles, they are incorporating recycled materials such as plastics, aluminium, and steel into their cars. Some manufacturers are even exploring the use of biodegradable components, which aligns with the growing global trend of reducing carbon footprints.
The Economic and Environmental Ripple Effect
The scrappage policy isn’t just about taking old cars off the road. It’s about reshaping the automotive industry and economy:
Boost to Automotive Sales: With scrappage certificates and state incentives, there’s a growing demand for new vehicles, particularly in the electric vehicle segment. This increase in demand is expected to benefit automakers and ancillary industries, including those manufacturing auto components.
Economic Impact: The establishment of more RVSFs and ATSs is expected to create job opportunities, particularly in vehicle dismantling, recycling, and testing sectors. The formalisation of these sectors ensures that environmental and safety standards are met, further benefiting the economy.
A Shift Towards Electric Vehicles: As older, less efficient vehicles are scrapped, there’s a natural shift toward adopting EVs. This change aligns with India’s goal to reduce carbon emissions and dependence on fossil fuels. It is expected to drive advancements in battery technology, charging infrastructure, and the broader EV ecosystem.
Challenges and the Road Ahead
While the policy has made significant headway, challenges remain:
Public Awareness: Many vehicle owners, especially in rural areas, are unaware of the benefits of scrapping old vehicles. The government, along with automakers, is working to spread awareness through campaigns and dealer networks.
Infrastructure Development: The success of the policy relies on the expansion of RVSFs and ATSs. In March 2024, Tata Motors inaugurated its fifth RVSF, Re.Wi. Re – Recycle with Respect, near Delhi, capable of scrapping 18,000 vehicles annually. Such infrastructure is crucial for the policy’s long-term success.
Formalising the Informal Sector: India’s informal scrapping industry, often operating without environmental oversight, poses a significant challenge. The government is working on formalising this sector by offering incentives and imposing penalties on those failing to meet environmental standards.
Conclusion: A Greener Tomorrow
India’s Vehicle Scrappage Policy isn’t just about scrapping old vehicles—it’s about reshaping the way we think about transportation, pollution, and sustainability. The collaboration between the government, automakers, and citizens is paving the way for a cleaner, safer, and more efficient future. As more vehicles are retired and replaced with eco-friendly alternatives, India is well on its way to becoming a global leader in sustainable mobility.
Yashi Mittal
Head, Corporate Communications
Future Mobility Media