Prime Minister Narendra Modi on Friday initiated the National Automobile Scrappage Policy and said the initiative would promote a circular economy and make the process of economic development more sustainable and environment-friendly.

The policy, targeted at recycling old and unfit vehicles, will give new identity to India's mobility and auto segment, Modi said in his address while virtually launching the initiative during 'Investors Summit' organised in Gandhinagar.

The summit, which saw participation of potential investors and industry players, was organized to attract investment for establishing vehicle scrapping infrastructure under the Voluntary Vehicle-Fleet Modernization Programme, an official release said.

The policy would provide a new identity to India in the mobility and auto sector, Modi stated. “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 road,” he added.

The prime minister said that India should work for “clean, congestion free and convenient mobility” in the 21st century and exuded confidence that the new policy will assist in reducing pollution in our city.

The policy will play a key role in the 'Waste to Wealth' programme, Modi stated. “We are promoting a circular economy. The aim is to make the process of development sustainable and environment-friendly. Apart from reducing pollution, this policy will also make India self-reliant in automobile and metal sectors and also prove beneficial for the common man.”

Under this policy, people who give their old vehicle for turning it into scrap would be given a certificate by the government. People having this certificate will not be charged any registration fee on the purchase of a novel vehicle, said Modi, adding that such vechile owners would also be entitled for some rebate on road tax.

Highlighting a key feature of the policy, Modi said that instead of the age of the vehicle, a fitness test would determine if the vehicle will be sent for scrapping. The policy would attract an investment of Rs 10,000 crore and generate thousands of employment opportunities, he said.