Union Minister of Road Transport and Highways, Nitin Gadkari, announced on Tuesday that companies making commercial and passenger vehicles have agreed to give discounts when people buy new vehicles and scrap their old ones. To get the discount, you need to have a valid Certificate of Deposit showing that the old vehicle has been scrapped.

The decision was made during a meeting at Bharat Mandapam, led by Nitin Gadkari and attended by top executives from the Society of Indian Automobile Manufacturers (SIAM). During this meeting, they discussed important challenges faced by the automobile industry.

Last year, the minister mentioned that the country needs 1,000 vehicle scrapping centers and 400 automated fitness test centers.

'India can be a scrapping hub'

The minister highlighted that the National Vehicle Scrappage Policy benefits everyone involved and mentioned that India has the potential to become a scrapping hub in South Asia.

"Circular economy is very important and it is going to create jobs in the country," Gadkari said.

Prime Minister Narendra Modi launched the National Vehicle Scrappage Policy in August 2021. He said the policy would help remove unfit and polluting vehicles from the roads and promote a circular economy.

Under the new policy, the central government announced that states and Union Territories (UTs) would offer up to a 25% rebate on road tax for vehicles bought after scrapping old ones. The vehicle scrappage policy has been in effect since April 1, 2022.

Announced in the Union Budget 2021-22, the policy requires personal vehicles to undergo fitness tests after 20 years. For commercial vehicles, these tests are needed after 15 years.