The national vehicle scrapping policy which was proposed in this year’s budget was finally unveiled on Friday by PM Narendra Modi in an investors’ meet.

Unveiling the new vehicle scrapping policy, PM Narendra Modi said that the move will play a big role in the modernisation of vehicular population in the country and removing unfit vehicles from the roads in scientific manner.

PM Modi said that fitness, not age, would be the criterion for scrapping obsolete automobiles, and if private automobiles are older than 20 years and commercial vehicles older than 15 years fail the fitness test, they will be scrapped.

“Today, the national automobile scrapping policy is being launched. This policy will give a new identity to mobility of New India, and the automobile sector. This policy will play a big role in modernising the country’s vehicle population and removing unfit vehicles from the roads in a scientific manner,” Modi said while launching the policy virtually at an investors’ meet at Mahatma Mandir in Gandhinagar.

PM Narendra Modi stressed on the need to protect the environment and reduce exploitation of natural resources, PM Modi said,“Rare metals are already rare. But who knows even the metals in abundance will also become rare.” 

India, under the leadership of PM Narendra Modi had already placed itself at the forefront of global climate change narrative by becoming the only country to meet what it had promised in 2015 under the Paris agreement on climate change, and this policy is another step in completing India’s commitment.

Besides the environmental benefits, the policy will also play an important part of the “circular” economy and will attract Rs 10,000 crore worth of new investments in the country providing employment to many, PM Modi added. Modi oversaw virtually the signing of six MoUs to set up registered vehicle scraping facilities (RVSF) in Gujarat, and one in Assam. The new policy would provide a boost to the country’s automobile and metal industries providing, he said. 

Describing the benefits of the policy for the common car owners, the Prime Minster said,”A certificate will be provided to the owner for scrapping their old vehicle. Those having this certificate will not need to pay any registration fee while buying a new vehicle. Secondly, some allowances will be given in payment of road tax. There will be savings in the cost of repair, maintenance, and fuel of the old vehicle.”

Adding more on the policy, Union Road Transport and Highways Minister Nitin Gadkari lamented the fact that the policy will boost manufacturing, create jobs and help both the Centre as well as state governments in earning up to Rs 40,000 crore each in GST.

Gadkari said that alongside developing Alang as an “integrated scrapping hub” for both ships and vehicles, an industrial cluster for scrap could be created at Kandla, where scrap from neighbouring countries that do not have scrapping facilities, arrives. “We dream to make India the scrapping hub of Southeast Asia. Scrapped vehicles from Bangladesh, Bhutan, Myanmar, Maldives, Nepal, Sri Lanka can be brought to Kandla,” he expressed.

Gadkari said nearly one crore vehicles have been found without valid fitness certificates and registration certificates, which contribute to about 10-12 percent more than new vehicles and also pose a safety hazard.

The long-awaited initiative is supposed to ultimately improve fuel efficiency, reduce pollution, and increase GST income due to the purchase of new vehicles.

Currently, India is the world’s fifth largest auto market in the world with a turnover of Rs 7.5 lakh crore and employs over 3.7 crore people, directly or indirectly.