Prime Minister Narendra Modi on Friday launched the national vehicle scrappage policy, saying it will help phase out unfit and polluting vehicles and also promote a circular economy.

The policy will give a new identity to India's mobility and auto sector, Modi said in a video address to the Investor Summit held to invite investment for setting up vehicle scrapping infrastructure under the Voluntary Vehicle-Fleet Modernization Programme.

We are promoting a circular economy. The aim is to develop a sustainable and environment-friendly economy, he said.

A circular economy is one where products are designed for durability, reuse and recyclability.

The policy will give a new identity to India in the mobility and auto sector, Modi said.

"This policy will play a major role in removing unfit vehicles from our roads in a scientific manner. It will modernise the vehicular population on our city roads, he said.

The prime minister said that India should work for clean, congestion free and convenient mobility in the 21st century.

The policy will play a key role in 'Waste to Wealth' programme, Modi said, adding it will also help in reducing pollution in our cities.

The launch of Vehicle Scrappage Policy today is a significant milestone in India's development journey. The Investor Summit in Gujarat for setting up vehicle scrapping infrastructure opens a new range of possibilities. I would request our youth & start-ups to join this programme, Modi tweeted before the event.