Policy Update
Riya Rawat
Background
India’s vehicle scrapping policy, initially launched in 2021 under the Voluntary Vehicle Fleet Modernization Program (V-VMP), was designed to enhance road safety and reduce environmental impact by mandating the scrapping of older vehicles. The original guidelines required private vehicles to be scrapped after 20 years and commercial vehicles after 15 years. While this helped phase out older models, it raised concerns among vehicle owners who maintained their vehicles in good condition, despite their age. Many felt that basing the scrapping decision solely on a vehicle’s age did not fully address environmental concerns.
In response to this feedback, and with a growing focus on pollution control, the 2024 amendments introduced a significant shift towards a pollution-based approach. Instead of relying only on the age of vehicles, the revised policy targets high-emission vehicles for scrapping, aligning with India’s broader goals of environmental sustainability and reducing urban air pollution. This updated focus also promotes the adoption of green technology and fuel-efficient vehicles.
These amendments are part of India’s broader commitment to its Nationally Determined Contributions (NDCs) under the Paris Agreement, aiming to cut greenhouse gas (GHG) emissions. By encouraging the removal of older, more polluting vehicles, the 2024 changes support the country’s transition towards a cleaner and more efficient transportation system.
Functioning
The 2024 updates to the Motor Vehicle Scrapping Policy bring substantial improvements to make the vehicle scrapping process more efficient and transparent. A major change is the introduction of reliable pollution assessments as the primary factor in determining whether a vehicle should be scrapped. This new approach allows vehicles that meet strict emission standards to continue operating, even if they are over 15 years old, providing relief to owners of well-maintained, low-emission vehicles. The focus has shifted from vehicle age to environmental performance, ensuring that only those failing to meet pollution regulations are taken off the road.
A significant feature of the updated policy is the introduction of the electronically tradeable Certificate of Deposit (CoD), which offers financial benefits for owners who choose to scrap their old vehicles. The CoD can either be traded or used as a discount on the purchase of a new vehicle, providing more options for vehicle owners. However, this benefit does not extend to government and impounded vehicles, reflecting the government’s intention to focus on encouraging private and commercial vehicle scrapping.
The amendments also impose new operational requirements for Registered Vehicle Scrapping Facilities (RVSFs). These facilities are now required to obtain approval from State Pollution Control Boards and meet strict environmental standards before they can begin operations. They must secure consent to operate at least 60 days in advance and undergo regular audits to ensure safe handling and disposal of hazardous materials like oils, fluids, and gases.
Furthermore, the policy encourages digital submissions for the scrapping process, aiming to reduce administrative delays and make the system more accessible to vehicle owners. This digital shift also includes enhanced cybersecurity measures for RVSFs, ensuring that vehicle data is handled securely. These changes collectively aim to improve transparency, promote environmental sustainability, and foster accountability within the industry.
Performance
Since its inception, the vehicle scrapping policy has made notable strides, with over 200,000 vehicles scrapped by the end of 2023, according to the Ministry of Road Transport and Highways (MoRTH). However, the 2024 amendments establish a more ambitious objective, seeking a 30-40% increase in the number of scrapped vehicles by year’s end. This growth is underpinned by state-specific data indicating that regions with stringent pollution control measures—such as Maharashtra, Delhi NCR, and Gujarat—have led the successful implementation of the policy. These states have particularly benefited from incentives, including discounts of up to 25% on new vehicle purchases and reduced road tax for those who choose to scrap older vehicles.
Looking ahead, projections for the policy’s expansion are highly optimistic. By 2026, the government aims to scrap more than 500,000 vehicles annually, which would significantly contribute to emission reductions and promote the transition to environmentally sustainable transportation options. The rise of digital platforms, coupled with increased public awareness, is expected to facilitate this growth, making the scrappage process more accessible to vehicle owners.
The economic impact of the policy is equally promising. The increase in vehicle scrappage has revitalized the automotive industry, driving demand for newer, cleaner vehicles. Industry analysts predict that vehicle sales could rise by up to 18% as a direct result of the scrappage policy. This projection is supported by examples from countries like the United States and Germany, where similar initiatives have led to substantial increases in automobile sales.
Impact
The 2024 amendments to the vehicle scrapping policy have had significant, wide-ranging impacts across various sectors. First and foremost is the environmental impact, with the pollution-centric approach expected to drastically reduce vehicle emissions by removing thousands of high-polluting vehicles from Indian roads. By encouraging the adoption of newer, fuel-efficient models, the policy aligns with India’s broader environmental goals. This focus on pollution control is anticipated to reduce the overall levels of particulate matter (PM) and nitrogen oxides (NOx) in urban areas, thereby improving air quality.
From an economic standpoint, the policy has spurred growth in both vehicle sales and the vehicle scrapping industry. By promoting the scrappage of older vehicles, it has helped generate demand for new, environmentally friendly vehicles. This, in turn, stimulates the automotive industry. According to estimates, the expansion of scrapping facilities across India could generate up to 50,000 direct jobs by 2025. These jobs span various roles in dismantling, recycling, and managing scrapped materials, helping formalize the sector and boost economic activity.
In addition to these environmental and economic benefits, the introduction of the tradeable Certificate of Deposit (CoD)offers public incentives. Vehicle owners can gain financial rewards for scrapping their old vehicles, using the CoD to receive discounts on the purchase of new vehicles. This system promotes a smooth transition to low-emission vehicles, contributing to a cleaner, more sustainable transport network across India
Emerging Issues
While the 2024 amendments have brought significant improvements, several challenges remain in the implementation of the vehicle scrappage policy.
- Limited Infrastructure: Despite progress, many regions—especially rural and semi-urban areas—still face a shortage of certified scrapping facilities. This limits access for vehicle owners in under-served areas, slowing down the overall effectiveness of the policy.
Solution: Encouraging public-private partnerships (PPPs) could help expand scrapping infrastructure, particularly in these regions, ensuring that facilities are more widely available. - Trustworthy Pollution Checks: Concerns have been raised regarding the reliability of pollution checks at fitness centers, with reports suggesting that some certificates are obtained without proper testing. This undermines the core goal of the policy to remove the most polluting vehicles from the road.
Solution: The Ministry of Road Transport and Highways (MoRTH) has sought collaboration from the auto industry to design more transparent and rigorous pollution-checking mechanisms, ensuring that testing is reliable and trustworthy. - Public Awareness: A significant portion of the population remains unaware of the policy’s benefits, the scrapping process, and the financial incentives available, limiting participation.
Solution: Public awareness campaigns and digital literacy initiatives are crucial for educating vehicle owners about the benefits of scrapping their old vehicles and the use of the Certificate of Deposit (CoD)system. - Inconsistent Enforcement: The enforcement of pollution control measures and scrapping regulations varies between states, resulting in uneven implementation of the policy.
Solution: A uniform enforcement framework across all states, backed by regular audits and stricter penalties for non-compliance, can ensure that the policy is applied consistently. - Digital Access Gaps: The electronic nature of the CoD system may exclude individuals in rural areas or those without reliable internet access, limiting their ability to benefit from the policy.
Solution: Providing offline support and enhancing digital literacy programs will be essential in bridging this gap and ensuring that all vehicle owners can participate in the scrappage process
Way forward
To fully unlock the potential of the 2024 Scrapping Policy, a comprehensive and multidimensional approach is essential. One of the key components to success is the formation of public-private partnerships (PPPs), which will be critical for expanding the network of Registered Vehicle Scrapping Facilities (RVSFs). This expansion is particularly important in regions that currently lack access to scrapping facilities, such as rural and semi-urban areas. By leveraging private sector investments, the government can accelerate the establishment of these facilities, ensuring broader national coverage and encouraging more efficient scrappage operations.
In parallel, the government must intensify its efforts on digital literacy. The electronically tradeable Certificate of Deposit (CoD), a crucial element of the scrappage system, can only reach its full potential if vehicle owners across the country—especially in remote areas—are equipped with the knowledge and tools to utilize it effectively. Improving digital literacy will empower individuals to navigate the scrapping process more seamlessly, ensuring that the policy’s benefits are accessible to a wider audience. While the government has made strides in integrating digital platforms and streamlining processes, continued engagement and education of the public will be critical to maximizing the policy’s overall impact.
Furthermore, a sustained partnership between the government and the automotive industry will be vital in ensuring that the pollution-checking mechanisms are both reliable and transparent. This collaboration will support the development of more accurate systems to assess vehicle emissions and ensure that only the most polluting vehicles are removed from circulation. By addressing emerging challenges and refining the implementation of the scrappage policy, India can make substantial progress towards its ambitious goals of reducing vehicular emissions, improving air quality, and fostering a sustainable, environmentally conscious transport system
Conclusion
The Revised 2024 Scrapping Policy marks a critical shift towards sustainable, pollution-conscious vehicle management in India. By moving away from the outdated age-based system and focusing instead on pollution control, the government has addressed a key gap in the original scrappage framework. This new approach, coupled with economic incentives and job creation potential, makes the policy an essential component of India’s broader environmental strategy.
Looking forward, the policy’s success will largely depend on the expansion of scrapping infrastructure, particularly through public-private partnerships (PPPs), which will play a pivotal role in bringing certified facilities to under-served areas. Additionally, public engagement, driven by digital literacy initiatives, and consistent enforcement of pollution checks will be vital in ensuring the full reach and impact of the policy. With continued investment and collaboration, the 2024 Scrapping Policy can drive India towards a cleaner, greener, and more sustainable future, benefitting both the economy and the environment
Selected references and important links
- Ministry of Road Transport and Highways. (2024). Notification on the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Amendment Rules, 2024. Government of India. https://morth.nic.in
- Hindustan Times. (2024). Vehicle scrapping policy may change soon, offer relief to 15-year-old units. HT Auto. https://auto.hindustantimes.com/auto/news/vehicle-scrapping-policy-may-change-soon-offer-relief-to-15-year-old-units-41726023041023
- Economic Times. (2024). Car more than 15 years old? State govts announce discounts for scrapping; 5 things to know about how to scrap an old car. Economic Times. https://economictimes.indiatimes.com/industry/auto/news/car-more-than-15-years-old-state-govts-announce-discounts-for-scrapping-5-things-to-know-about-how-to-scrap-an-old-car/articleshow/85609191.cms
- Singh, S. G. (2024). Soon, your car’s scrappage will depend on pollution, not age. Business Standard.https://www.business-standard.com/article/finance/soon-your-car-s-scrappage-will-depend-on-pollution-not-age-here-s-how-124091101012_1.html
- Ministry of Road Transport and Highways. (2024). Notification on the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Amendment Rules, 2024. Government of India.https://morth.nic.in
- Ministry of Road Transport and Highways. (n.d.). GSR Notifications: GSR 220, GSR 653, GSR 192(E). Government of India. https://morth.nic.in
- Ministry of Road Transport and Highways. (2019). Road Transport Yearbook Publication (2019-20). Government of India. https://morth.nic.in
- Hindustan Times. (2024). Vehicle scrapping policy may change soon, offer relief to 15-year-old units. HT Auto https://auto.hindustantimes.com/auto/news/vehicle-scrapping-policy-may-change-soon-offer-relief-to-15-year-old-units-41726023041023
- Economic Times. (2024). Car more than 15 years old? State govts announce discounts for scrapping; 5 things to know about how to scrap an old car. Economic Times. https://economictimes.indiatimes.com/industry/auto/news/car-more-than-15-years-old-state-govts-announce-discounts-for-scrapping-5-things-to-know-about-how-to-scrap-an-old-car/articleshow/85609191.cms
About the Author: Riya Rawat is a research intern at the Impact and Policy Research Institute (IMPRI), pursuing a second master’s degree in Political Science. With a strong background in public policy, gender studies, and international relations, her research interests focus on policy development, analysis, and global affairs.
Acknowledgement: The author extends sincere gratitude to Dr. Arjun Kumar and Aasthaba Jadeja for their invaluable guidance and support.
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