Vehicle Scrappage Policy and Road Safety Initiatives

10 Feb 2026 CW Team

Lump sum incentives to States range from Rs 100 mn to Rs 2 bn linked to tax concessions. States qualify for graded per vehicle incentives for government vehicles of Rs 50,000 to Rs 150,000 and for non government vehicles of Rs 5,000 to Rs 20,000 based on volumes scrapped at facilities. Automated Testing Station incentives are Rs 50 mn to Rs 90 mn with 25 per cent linked to award of work and 75 per cent to operationalisation.

A statutory Cashless Treatment for Road Accident Victims scheme was notified in May 2025 with guidelines setting process flows and stakeholder roles. The scheme provides treatment cover up to Rs 0.15 mn per victim subject to a maximum of seven days and allows stabilisation and treatment for up to 24 hours in non life threatening cases and up to 48 hours in life threatening cases at designated hospitals. Reimbursements will be routed through the Motor Vehicle Accident Fund funded by general insurers and budgetary support for uninsured cases and the scheme will be implemented using electronic Detailed Accident Report and TMS 2.0 platforms.

Road safety measures include mandatory audits at all stages by third party auditors, designation of a Road Safety Officer at each regional office and issuance of signage guidelines for expressways and national highways. Short term rectification of black spots will use markings, signages and crash barriers while long term measures include geometric and junction improvements. Electronic monitoring rules for enforcement on high risk corridors have been promulgated, provisions for ambulances with paramedical staff at toll plazas have been made and the Rah Veer reward for Good Samaritans has been increased to Rs 25,000 from Rs 5,000, the ministry said.

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As on 30 January 2026 the ministry reported 129 registered vehicle scrapping facilities are operational across 21 States and union territories and that 430,306 vehicles have been scrapped. The Department of Expenditure has allocated Rs 20 billion (bn) under the Special Assistance to States for Capital Investment scheme for 2025–26 and smaller allocations are expressed in million (mn) amounts. Lump sum incentives to States range from Rs 100 mn to Rs 2 bn linked to tax concessions. States qualify for graded per vehicle incentives for government vehicles of Rs 50,000 to Rs 150,000 and for non government vehicles of Rs 5,000 to Rs 20,000 based on volumes scrapped at facilities. Automated Testing Station incentives are Rs 50 mn to Rs 90 mn with 25 per cent linked to award of work and 75 per cent to operationalisation. A statutory Cashless Treatment for Road Accident Victims scheme was notified in May 2025 with guidelines setting process flows and stakeholder roles. The scheme provides treatment cover up to Rs 0.15 mn per victim subject to a maximum of seven days and allows stabilisation and treatment for up to 24 hours in non life threatening cases and up to 48 hours in life threatening cases at designated hospitals. Reimbursements will be routed through the Motor Vehicle Accident Fund funded by general insurers and budgetary support for uninsured cases and the scheme will be implemented using electronic Detailed Accident Report and TMS 2.0 platforms. Road safety measures include mandatory audits at all stages by third party auditors, designation of a Road Safety Officer at each regional office and issuance of signage guidelines for expressways and national highways. Short term rectification of black spots will use markings, signages and crash barriers while long term measures include geometric and junction improvements. Electronic monitoring rules for enforcement on high risk corridors have been promulgated, provisions for ambulances with paramedical staff at toll plazas have been made and the Rah Veer reward for Good Samaritans has been increased to Rs 25,000 from Rs 5,000, the ministry said.

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