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National Vehicle Scrappage Policy
What it is
The Voluntary Vehicle Modernisation Programme, launched Aug 2021, phasing out unfit vehicles through Automated Testing Stations that assess fitness and Registered Vehicle Scrapping Facilities that dismantle them
Vehicles past 15 years must pass a fitness test or be scrapped. A Certificate of Deposit unlocks road-tax rebates of 25% on private and 15% on commercial vehicles, registration-fee waiver and manufacturer discounts
Impact on industries
- A replacement-demand lever for commercial vehicles, where a fleet operator can recover Rs 1.5-4 lakh a vehicle in combined incentives and scrap value
- Formalises a largely informal dismantling trade and feeds verified scrap steel, aluminium and reusable components into the recycling chain
- Execution is the binding constraint - around 4 lakh vehicles scrapped to Dec 2025 against annual sales in the millions, with a CAG audit finding several states had made no progress at all
- Infrastructure is short and uneven - ~129 RVSFs and 156 ATS by early 2026 against a NITI Aayog need of 227 and 441, concentrated in four state corridors