Union Minister Nitin Gadkari on Friday gave a big message to the automobile industry – if all the 97 lakh junk and polluting vehicles in the country are scrapped, India can benefit by Rs 40,000 crore in the form of GST.
Speaking at the ACMA Annual Session 2025, Gadkari said that this big clean-up campaign will not only increase government revenue but will also create 70 lakh jobs and will also boost India’s efforts to become the world’s number one automobile industry within five years, reports news agency PTI.
So far, the progress of the scrapping policy has been modest. As of August 2025, only 3 lakh vehicles have been scrapped, of which 1.41 lakh were government vehicles. On an average, 16,830 vehicles are being scrapped every month. The private sector has invested Rs 2,700 crore in building this ecosystem.
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India’s vehicle scrapping policy, also known as the Voluntary Vehicle Modernisation Programme (V-VMP), is designed to phase out old, unsafe and polluting vehicles in an environmentally friendly manner.
Auto industry should give discount on scrappage: Nitin Gadkari
According to PTI report, Gadkari urged automobile manufacturers to promote scrapping by offering at least 5 per cent discount to customers who present scrappage certificate while purchasing a new vehicle.
“This is not charity, because this will increase demand,” he said, adding that the cycle of scrapping and replacement could keep the industry’s demand pipeline strong.
Why is scraping necessary?
According to Gadkari, proper implementation of the scrappage policy can reduce the cost of automobile components by up to 25 per cent as recycled steel, aluminium and other materials are returned to the supply chain.
Also, phasing out 97 lakh unfit vehicles will reduce emissions, reduce fuel consumption and improve road safety standards.
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