India’s ambitious vehicle scrappage policy, launched with high expectations to phase out aging, high-emission, and end-of-life vehicles (ELVs) from public roads, has run into severe implementation bottlenecks. A detailed assessment report published by NITI Aayog reveals that less than 3 percent of the country’s targeted ELVs were successfully processed through authorized channels between August 2022 and July 2025. The policy gridlock leaves an estimated 12 million over-aged vehicles operating across the country, actively driving up toxic emissions and compromising national road safety standards.
According to the government think-tank’s data, only about 350,000 vehicles were brought to Registered Vehicle Scrapping Facilities (RVSFs) during the entire three-year assessment window. The vast majority of aging commercial and private vehicles continue to run indefinitely on public streets or are dismantled by unregulated, informal scrap dealers who handle toxic automotive waste without environmental safeguards.
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A Fractured Two-Ministry Regulatory Loop
The NITI Aayog report highlights a critical administrative rift that has severely weakened the program’s foundation. The scrappage ecosystem is currently managed under two completely isolated regulatory structures that fail to communicate with each other:
- The Enforcement Arm: The Ministry of Road Transport and Highways (MoRTH) operates the centralized Vahan database, which tracks over-aged vehicle deregistrations and manages the physical enforcement side of removing unfit vehicles from circulation.
- The Recycling Arm: The Ministry of Environment, Forest and Climate Change (MoEFCC) runs the independent Extended Producer Responsibility (EPR) portal, which enforces the newly established End-of-Life Vehicles (Management) Rules, 2025 to hold automobile manufacturers legally accountable for recycling industrial waste.
Because the Vahan registration network and the EPR compliance portal are completely unintegrated, investigators found it practically impossible to track an over-aged vehicle’s journey from its initial deregistration to its final mechanical shredding. This data gap prevents the government from accurately issuing or verifying digital recycling certificates, stalling the entire economic engine of the policy.
The Broken Financial Incentive Model
Beyond the digital disconnect, the policy’s economic design has failed to convince ordinary vehicle owners to voluntarily surrender their assets. Under the state-mandated EPR framework, automobile manufacturers are legally required to fulfill strict steel recycling quotas:
Automobile Steel Recycling Targets (EPR Framework):
- FY 2026 to FY 2030: Minimum 8% recycled steel per vehicle weight
- FY 2031 to FY 2035: Linear expansion stage
- FY 2036 Onward: Maximum target cap of 18%
To meet these targets, manufacturers are supposed to buy digital EPR certificates generated by authorized RVSFs based on the volume of steel they recover from crushed cars. However, because the trading market for these certificates remains completely unorganized and lacks transparent floor pricing, the financial benefits rarely trickle down to consumers.
Vehicle owners find that authorized RVSFs offer scrap values that are significantly lower than the quick cash payouts offered by local, unregulated roadside mechanics. Furthermore, promised state incentives—such as motor vehicle tax concessions and registration fee waivers for new vehicle purchases—remain highly unevenly implemented across different state transport departments, leaving buyers with zero financial motivation to choose the legal route.
Metropolitan Clustering and the Informal Monopoly
The report also points to massive geographical inequality in India’s green infrastructure development. The vast majority of the country’s authorized automated testing stations and high-speed shredding units are heavily clustered around top-tier metropolitan manufacturing hubs. This leaves tier-2 cities, tier-3 towns, and rural districts with absolutely no local access to authorized disposal points.
Consequently, the informal automotive recycling sector continues to hold an absolute monopoly over the domestic market. To fix these systemic failures, NITI Aayog has urged the government to immediately integrate informal scrap dealers into the formal grid through state-sponsored training, licensing, and standardized collection partnerships.
The commission emphasized that unless the center forces database integration, establishes a transparent floor price for EPR certificates, and rolls out aggressive public awareness campaigns, the vehicle scrappage policy will continue to fall short of its environmental and economic goals.
