New Vehicle Scrappage Policy- Union Budget 2021-22

by S S Rana & Co – India’s Leading IP Law Firm 


The much awaited Union Budget address (2021-2022) was made by the Finance Minister, Nirmala Sitharaman on February 01, 2021. The Minister in the speech has announced- Voluntary Vehicle Scrapping Policy, for phasing out old and unfit vehicles from the Indian streets. While substantiating on the Scrappage Policy, Ms. Sitharaman stated that under the Policy- personal vehicles after 20 years and commercial vehicles after 15 years would undergo fitness tests in automated fitness centres.

Key Points:

  • Voluntary Vehicle Scrapping Policy to be notified soon
  • Vehicles (private and commercial) to under fitness test after 20 years and 15 years of use
  • Fitness tests to be done at automated fitness centers
  • Specifics of Policy to be announced soon

An Insight into Vehicle Scrappage Policy

The Policy is expected to substantially impact air pollution issues in India and maintain environmental sustainability. It was also announced that the specifics of the Policy would be announced soon.

Hence, it is abundantly clear that under the New Policy all personal vehicles and commercial vehicles will have to mandatorily undergo fitness tests at automated fitness centres in 20 years and 15 years respectively.

NGT Bans Old Vehicles in Delhi NCR

In a landmark verdict, the National Green Tribunal (NGT) in 2015 imposed a ban on all diesel vehicles older than 10 years and all petrol vehicles older than 15 years, in Delhi NCR. Pursuant to the NGT’s afore-mentioned decision, the Delhi Road Transport Office (“RTO”) was directed to de-register all diesel vehicles which were older than 10 years in the Capital.

Also read What to do with vehicles older than 10 years in Delhi NCR?

Alarming pollution and toxic air particularly in the Delhi NCR has compelled floating of Schemes and Policies to combat air pollution issues in India. A scheme to scrap old vehicles which significantly impacts pollution is the need of the hour.