Vehicle’s Scrappage policy: All you need to know about it!


Government of India has finally taken decision on old vehicle which are running over 15 years. The programme features to replace old vehicles from the roads of India  this is done to reduce the pollution, Recycle old materials, to create more jobs and to boost Indian automobile sector How? Just read the blog further.


On 1 February 2021, Nirmala Sitharaman (Finance Minister Govt. of India) stated “the govt. will announce a voluntary vehicle scrapping policy to phase out old and unfit vehicles”. Further, this was done to reduce pollution and to boost eco friendly vehicles.

On 18th March 2021, Nitin Gadkari (Minister for Road Transport and Highways) introduced the scheme in Lok Sabha.

What’s the policy is all about?

The policy features that the commercial vehicles which are running from more than 15 years and the passenger vehicles running for more than 20 years will be mandatorily be scrapped. Moreover, several countries have already implemented this policy to promote their Automobile sectors. Even U.S. has a programme called Car Allowance rebate System (CARS), which provides a financial support on scrapping older vehicles and replacing them with the new one. The programme is also known as ‘Clunker’s Programme’.

What about Pros and Cons?


  • Registration fee: No registration fee will be charged for new vehicles.
  • Manufacturer’s Offer:  Depending upon the manufacturer they can provide a discount of about 5% as a rebate for the customers included under this policy.
  • State’s Offer: If States want they can give a rebate of about 25% on road tax as well as 15% on domestic and commercial vehicles.
  • Extra Savings: The beneficiaries can also be able to save their fuels and can also have an advantage on low maintenance fees on their new vehicles. They will be a part of Eco-friendly nature as well and can contribute towards environment.


  • Affordability: This is not going to give advantage to the people who can’t afford new vehicles. Especially, some poor commercial vehicle owner.
  • Green Tax: The state can also charge a ‘Green Tax’ on the customers included under this Policy.
  • Renewal Fees: There are chances for a hike in Registration fees especially for Domestic or Private Vehicle owners.

Vehicle owners who don’t need to worry

  • Hybrid vehicle Owners.
  • Electric Vehicle (EV) Owners.
  • Vehicles running on quality fuels such as CNG, Ethanol or LPG.
  • Farming equipments such as Tractors, Harvesters etc.

Comment me what’s your views about this policy.

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Credits: All the images used are of common licence.

Published by Sacred

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