Prime Minister Narendra Modi on Friday formally launched the vehicle scrappage policy that makes commercial vehicles which are more than 15-years-old and personal vehicles over 20-years-old eligible for scrapping.

The tentative date for the policy to take effect is October 1 for private and commercial vehicles. The scrapping of government and PSU vehicles above 15 years will be undertaken from April 1, 2022.

Modi said the vehicle scrappage policy would bring investments of Rs 10,000 crore. He said Alang in Gujarat could become the hub for scrapping.

Under this policy, people who want to turn their old vehicle into scrap will get a certificate from the government.

The certificate entitles them to free registration of their new vehicles. The owners of the certificate will be eligible to 4-6 per cent rebate on a new vehicle.

Besides, they will get a road tax rebate.

Much of the success of the scheme will depend on auto makers offering discounts and the state governments waiving off registration fee and offering rebate on road taxes.

The state governments have been advised to offer a road tax rebate of up to 25 per cent for a personal vehicle and 15 percent for commercial vehicles.

“Alang (in Gujarat's Bhavnagar district) has already established itself as a ship recycling hub. It also has skilled manpower. I strongly feel that it can also become a hub for turning vehicles into scrap,” the Prime Minister said.