Scrappage policy for motor vehicles effective from October 1

Scrappage policy for motor vehicles effective from October 1

New Delhi: The Central Government has announced a scrappage policy for motor vehicles in the country which would be implemented over several phases from October 1 this year. As per the policy, commercial vehicles aged over 15 years and private vehicles over 20 years have to pass a fitness test in order to obtain re-registration.

In case the vehicles fail to clear the first fitness test, they can take another test. A vehicle which fails in the second test has to be compulsorily scrapped.

Meanwhile, the government has implemented a steep hike in fees for re-registration and fitness test with the aim of keeping old vehicles off the road. The notification announcing the scrappage policy has also laid out the rules for setting up scrapyards and automated fitness testing centres in all districts of India.

As part of implementing the policy, all vehicles owned by government and self-government institutions and transport buses would be scrapped after 15 years.


Various deadlines have been set by the Central Government to implement the policy. While the rules for setting up fitness testing centres and scrapyards would come into force from October 1 this year, the scrapping of government vehicles aged over 15 years would start on April 1, 2022.

Similarly, the mandatory fitness test for commercial vehicles would be implemented from April 1, 2023 and that of other vehicles and private vehicles from June, 2024.

Scrapyards, test centres

The policy document says that scrapyards should follow all laws related to the environment, pollution control and labour. Specifically, measures to check air, water and sound pollution have to be in place. In addition, arrangements should be made to shift dangerous waste materials safely.

Regarding fitness test centres, the scrappage policy says that they could be joint enterprises involving the government and private investors or solely under private ownership. Automobile companies also can set up test centres. Moreover, the Transport Ministry would open a ‘Model inspection certification centre’ in each district.

However, entrepreneurs investing in testing centres should not own vehicle repair centres or spare-parts businesses. They have to arrange facilities for online booking and automatic report preparation. The policy envisages opening of 75 fitness testing centres in the country by March 2023 and at least 50 scrapyards by December 2023. It is estimated that the total cost of setting up a fitness testing centre would be between Rs 17-33 crore.

Fees hiked

As per the fee hike for re-registration notified by the government, the owner of an old bike of over 15 years has to pay a fee of Rs 1,000 instead of Rs 300 from October 1 this year for the purpose. Similarly, the fees for private cars have been increased from Rs 600 to Rs 5,000; three-wheelers from Rs 600 to Rs 2,500 and imported cars from Rs 5,000 to a whopping Rs 40,000.

Meanwhile, the new fees for transport vehicles are as follows with the old fees in brackets. Three-wheelers Rs 3,500 (Rs 1,000); bike taxi Rs 1,000 (Rs 500); taxi cabs Rs 7,000 (Rs 1,000); medium goods-passenger vehicles Rs 10,000 (Rs 1,300) and heavy goods-passenger vehicles Rs 12,500 (Rs 1,500).

The fees for fitness test for re-registration have also witnessed an increase. For two-wheelers, the new fees are Rs 400 and for cars, Rs 800. A delay in re-registration would invite a fine of Rs 300 per month for two-wheelers, Rs 500 per month for cars and Rs 50 per day for commercial vehicles.

Incentives for owners

While announcing the scrappage policy, the government has offered some incentives for owners of scrapped vehicles. For instance, the owner of a scrapped vehicle would be paid 4-6 percent of the showroom price of a new vehicle of the same class from the scrapyard. Guidelines would also be issued to direct vehicle manufacturers to give a discount of 5 per cent for new vehicles on production of the scrappage certificate. State governments too would be asked to give a rebate of 25 per cent on road tax for private vehicles and 15 per cent for commercial vehicles. There is also a proposal for waiver of registration fees on purchase of a new vehicle.

FASTag issue

Regarding the implementation of FASTag, Minister for Road Transport and Highways Nitin Gadkari said that the police have been directed to penalize vehicles lacking a FASTag for toll and GST evasion. “Around 93 per cent of the vehicles utilize the FASTag facility but 7 per cent still pay the double charges at toll booths,” he said.

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