Union Minister Nitin Gadkari has underscored the transformative potential of India’s vehicle scrappage policy, projecting that large-scale phasing out of unfit and polluting vehicles could not only reduce environmental hazards but also generate significant economic benefits. Speaking at the ACMA Annual Session 2025, Gadkari revealed that the Centre and states together could earn up to ₹40,000 crore in Goods and Services Tax if all of the country’s 97 lakh identified unfit vehicles are scrapped. He stressed that this measure, if executed comprehensively, could create as many as 70 lakh jobs, boost demand in the automobile sector, and bring down costs for manufacturers and consumers alike.
So far, nearly three lakh vehicles, including 1.41 lakh government-owned vehicles, have already been scrapped under the program. Gadkari pointed out that, on average, about 16,830 vehicles are being scrapped every month, while the private sector has invested ₹2,700 crore in building scrappage infrastructure. The initiative is part of the Voluntary Vehicle Fleet Modernisation Program (V-VMP), also known as the Vehicle Scrapping Policy, which is designed to establish an environmentally friendly ecosystem for retiring old vehicles. Under existing Motor Vehicle Rules, commercial vehicles undergo fitness tests every two years up to the age of eight and annually thereafter. Private vehicles face testing requirements at the time of registration renewal after 15 years and subsequently every five years, while government vehicles have a fixed operational lifespan of 15 years.
The minister also urged the automobile industry to encourage participation by offering at least a 5% discount to buyers presenting scrappage certificates when purchasing new vehicles. According to him, such incentives are not a charitable gesture but rather a smart way to stimulate demand in the sector. He highlighted that scrapping unfit vehicles would also reduce the cost of automobile components by nearly 25%, strengthening the competitiveness of Indian manufacturers. With GST rationalisation already having given a boost to the industry, Gadkari said the scrappage policy would further expand market opportunities and help propel India’s automobile industry to global leadership within the next five years. At present, the US automobile sector is valued at ₹78 lakh crore, followed by China at ₹47 lakh crore, while India lags behind at ₹22 lakh crore.
Beyond the automobile sector, Gadkari addressed the larger issue of India’s heavy dependence on fossil fuel imports, which cost the nation around ₹22 lakh crore annually. He stressed that this dependence not only drains economic resources but also worsens pollution. He reiterated the need to diversify agriculture toward energy production, pointing out that ethanol derived from sugarcane, broken rice, and other agricultural products could be a sustainable alternative. In his words, energy security is vital for the country, especially given current global instability, and ethanol blending can play a key role in achieving this goal.
Road safety was another area of concern flagged by the minister. He revealed that in 2023 alone, India recorded five lakh road accidents, resulting in 1.8 lakh deaths, with two-thirds of the victims in the 18–34 age group. Such figures, he warned, underscore the urgent need for stronger safety regulations and greater public awareness.
Responding to queries about the government’s plan to introduce 27% ethanol blending in petrol (E27), Gadkari clarified that the move would not compromise quality standards. He pointed to Brazil’s successful adoption of E27 for nearly five decades as proof of its feasibility. He assured that only after rigorous testing by the Automobile Research Association of India (ARAI) would the proposal be forwarded to the petroleum ministry and then taken up by the Cabinet. He sought to dispel any confusion on the matter, emphasising that the government’s decisions would be guided by both scientific evidence and public interest.
