The Aakhya Weekly #156 | Scrapped by Policy, Not by Choice
In Focus: Policy in the Fast Lane, People in Reverse
A car isn’t just four wheels in India; it’s family. When she rolls home, she’s welcomed with vermilion on her hood, a priest’s chants, and a temple visit. She often gets a name—mine did. A dent on her fender bruised me more than it did her. She’s washed, polished, and loved daily because Indians are emotional beings who bond with what, for others, are merely objects—but for us, they are memories, milestones, and members of the household.
This deep emotional and economic connection to personal vehicles, especially among India’s middle class, has now collided head-on with Delhi’s recent fuel prohibition for older vehicles—a policy driven by environmental urgency, but fraught with logistical blind spots and socio-economic challenges.
Fuel Rules Owner Blues
The fuel ban, initially set for 1 July 2025 and later deferred to 1 November 2025 in Delhi and five key NCR districts, has imposed substantial financial burdens on countless vehicle owners. Nearly 62 lakh vehicles are affected, including 41 lakh two-wheelers and 18 lakh cars. Many middle-class and lower-income individuals typically purchase vehicles with the expectation of using them for 15 years or more, often through loans. The abrupt declaration prohibiting petrol vehicles over 15 years old and diesel vehicles over 10 years old from refuelling has rendered these assets effectively worthless. This has caused widespread concern, since the decision was made without assessing the actual condition of each vehicle or determining whether it significantly contributes to pollution.
What has further intensified the issue is the scrapping value offered—typically around 4–6% of the original cost—combined with minimal road-tax rebates. This means owners lose approximately 94% of their vehicle's value, forcing them into new loans for replacement vehicles. This disproportionate impact on middle and lower-income segments, who often lack the financial flexibility to "upgrade" their vehicles on demand, has led to challenges. The Delhi government itself acknowledged concerns about unfair treatment and technical glitches in the Automated Number Plate Recognition (ANPR) systems used for enforcement, leading to the policy's deferment.
Scrap, Struggle and Starve
This policy has significantly disrupted the Used Vehicle Market, also creating unique challenges for companies like ‘Car Dekho’ and ‘CARS 24’ that operate in this sector and creating substantial economic hardship for various stakeholders, especially small traders, taxi drivers, and gig workers who depend on these vehicles for their sustenance. These workers, who typically operate on razor-thin margins, rely heavily on older, often fully paid-off vehicles to sustain their livelihoods. Without a backup plan, they could now face joblessness or debt.
Although there was an initial surge in inquiries from outside Delhi for these now-banned vehicles, this was quickly followed by a dramatic 40–50% crash in second-hand car prices, leaving traders and owners no choice but to sell at steep losses. To make matters worse, obtaining NOCs from the Transport Department for selling vehicles in other states, once a smooth process, is now plagued by delays, further immobilising them. For many affected workers, this policy doesn’t just remove a vehicle; it dismantles their economic stability, pushing them into uncertainty, debt, or outright unemployment without a viable safety net.
What’s Missing in the Policy Shift?
The policy was intended to address severe air pollution; however, it is hampered by deep structural weaknesses. This situation highlights a fundamental disconnect between policy intent and the economic realities faced by ordinary citizens, affecting their mobility and financial stability, which risks creating more socio-economic and environmental issues than it solves. The core implementation deficits are:
1. Inadequate Public Transport Alternatives: Delhi's public transport system is not yet equipped to absorb the large number of displaced private vehicle users. Though DTC modernisation and Metro Phase 4 are underway, completion timelines stretch into 2026, leaving a gap in mobility access. Without seamless, last-mile transit options, many commuters have no viable alternatives. Banning older vehicles without offering substitute services is perceived as coercive rather than constructive, especially for daily wage earners and suburban commuters who depend on personal means of transportation for basic mobility.
2. Insufficient EV Subsidies and Charging Infrastructure: While EVs are central to India’s green mobility push, high upfront costs and patchy infrastructure deter adoption. Subsidies are often targeting commercial fleets over personal buyers, with benefits largely accruing to automakers or dealers rather than consumers. The absence of battery tech investment and public awareness campaigns further weakens the shift. Unless the economic and operational gap between EVs and Internal Combustion Engine (ICE) vehicles is closed, widespread EV adoption remains out of reach for most.
3. Weak End-of-Life Vehicle (ELV) Management: The enforcement of fuel embargo led to a surge in obsolete vehicles without an adequate scrappage ecosystem. Only 44,800 private vehicles have been scrapped as of August 2024, against a projected 21 million ELVs by 2025. Lack of Registered Vehicle Scrapping Facilities (RVSFs) and recycling systems raises the risk of unregulated, polluting disposal or interstate resale. This undermines both environmental gains and public compliance. Without a scalable, transparent ELV network, the ban may simply relocate the pollution problem instead of solving it.
Sustainable Path Forward
Addressing the capital's complex air pollution challenge and the socio-economic repercussions of the fuel ban requires a multifaceted and integrated approach. Firstly, expanding and upgrading public transport infrastructure must be prioritised and accelerated. This includes not only the Delhi Metro expansion but also a comprehensive overhaul of bus services, improved last-mile connectivity, and seamless integration between different modes of transport.
Secondly, a transparent ELV management system is crucial to prevent a looming waste crisis. This involves not only establishing more registered scrapping facilities that adhere to environmental norms but also incentivizing material recovery to minimize the carbon footprint associated with manufacturing new vehicles Implementing a policy that offers better compensation or higher incentives for scrapping old vehicles, perhaps based on emission performance rather than arbitrary age, could encourage compliance and reduce the financial burden on owners.
Thirdly, policy implementation should be guided by data and stakeholder engagement. The initial technical glitches with ANPR systems and the public backlash highlight the importance of thorough preparation and a phased rollout, as observed during the deferment of the ban. Engaging citizen groups, consumer advocates, and industry representatives in policy reviews will help fine-tune measures and address unintended consequences.
Finally, shifting from purely age-based criteria to emission or fitness-based limits for vehicles should be considered. This would allow well-maintained older cars to remain on the road after passing stringent pollution tests, addressing concerns about fairness and legal challenges. This approach, combined with strong enforcement of pollution standards, would target the actual polluters more effectively while mitigating the severe economic impact on vehicle owners.
Policy Must Start with Sensitivity
In an Indian family, bottles live multiple lives before reaching the scrap dealer’s cart. Nothing is wasted until it absolutely must be. That’s who we are, not blind consumers, but natural conservationists. Long before reuse, recycle, became global buzzwords, Indian households were already living that ethos, stitching, fixing, and repurposing. Our cars are no different. For most Indian families, a vehicle is not a disposable object; it embodies years of hard work, represents a symbol of success, and often serves as a significant intergenerational investment.
This deep-seated emotional and financial attachment to automobiles is severely challenged by a policy that treats assets as disposable once an arbitrary age limit is reached. This current approach risks alienating a populace culturally attuned to frugality, transforming what could be a beneficial environmental initiative into a punitive measure that disproportionately burdens citizens, especially the middle class and vulnerable gig economy workers. In a country that naturally believes in second chances, even for objects, our people deserve no less from policy. Clean air is essential, but so is a just, inclusive path to getting there.
Top Stories of the Week
Relief for Salaried Class: EPFO Unlocks Housing Funds, Plans Early Exit Option
In a landmark move aimed at empowering salaried employees, the government has revised the Employees’ Provident Fund (EPF) withdrawal rules, easing accessibility to funds utilised for housing and life needs. Under the newly added Para 68-BD of the EPF Scheme, 1952, members can now withdraw up to 90% of their PF corpus for purchasing, constructing, or paying EMIs on a house after just three years of service, down from the previous five-year limit.
In addition, the EPFO has rolled out several user-friendly upgrades, including instant UPI and ATM withdrawals of up to ₹1 lakh, auto-settlement limits have been raised to ₹5 lakh, and a streamlined claims process, reducing verification steps from 27 to 18.
In a yet-to-be-finalised proposal, the Centre is also considering allowing full or partial withdrawals every 10 years, providing early retirees and career shifters a lifeline without waiting till age 58. If approved, the move could benefit over 7 crore active EPFO members, especially women and young professionals opting for non-linear careers.
Cabinet Clears PM Dhan-Dhaanya Krishi Yojana: Targeting Agri-Transformation in 100 Districts
The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Prime Minister Dhan-Dhaanya Krishi Yojana for six years, covering 100 districts. The scheme is in line with NITI Aayog’s Aspirational Districts Programme. Being a first-of-its-kind scheme, it focuses exclusively on agriculture and allied sectors. It aims to boost productivity, promote crop diversification and sustainable practices, improve irrigation and storage at local levels, and ease access to credit. The scheme aligns with the 2025–26 Budget announcement and will operate through the convergence of 36 existing schemes across 11 central departments, with state and private sector partnerships.
There will be committees formed at the district, state, and national levels for effective planning, implementation and monitoring of the Scheme. Alongside this, customised district-level plans will be created by District Dhan-Dhaanya Samitis, involving progressive farmers. The plans will support national priorities like water and soil conservation, organic farming, and natural farming. Progress will be monitored through 117 key indicators on a digital dashboard with monthly updates. NITI Aayog will provide strategic guidance and evaluation, and the Central Nodal Officers will ensure sufficient oversight.
A Few Good Reads
Rahul Matthan argues that just as the Industrial Revolution reshaped legal doctrines, artificial intelligence will compel a fundamental rethinking of liability, contracts, and intellectual property law.
Shyam Saran observes that assumptions about a declining US under Trump have made China more assertive and overbearing in its stance towards India.
Last week’s waterlogging in Gurugram, Sanjay Srivastava notes, is less a failure of infrastructure and more a symptom of a “rural state of mind” that undermines the idea of a shared urban public.
K. S. Uplabdh Gopal views India’s $11 billion medical devices sector at a crossroads, where policy stability, better oversight, and support for innovation are key to unlocking its $50 billion future.
Hari Seshasayee urges India to adopt a standalone Latin America strategy centred on energy, food, and critical minerals, beyond Global South rhetoric.
well written piece and adequately covering the pain points. i essentially liked the Policy Must Start with Sensitivity, which should be the bedrock of any change.
Nicely done.