The Union Cabinet has approved a major two-year scheme worth ₹9,585 crore to reduce air pollution in the Delhi-NCR region by encouraging the replacement of older trucks and buses with cleaner vehicles. The scheme aims to accelerate the shift to BS-VI compliant vehicles and electric vehicles (EVs), helping improve air quality in one of India’s most polluted urban regions.
The initiative will be funded through the National Capital Region Planning Board (NCRPB) under the Ministry of Housing and Urban Affairs and implemented jointly by the Ministry of Road Transport and Highways and the Ministry of Petroleum and Natural Gas. The governments of Delhi, Haryana, Rajasthan, and Uttar Pradesh will also participate in its implementation.
Key Highlights
- Union Cabinet approves a two-year vehicle replacement scheme for Delhi-NCR.
- Total financial outlay of ₹9,585 crore, including ₹5,041 crore from the Central Government.
- Around 2.07 lakh trucks and buses are expected to benefit from the scheme.
- Owners of BS-IV and older vehicles will be encouraged to replace them with BS-VI or electric vehicles.
- Vehicle owners will receive interest subsidies, fuel vouchers, tax concessions, and manufacturer discounts.
- The scheme will be implemented through a fully digital platform and monitored at both the central and district levels.
Air pollution continues to be a major public health concern in Delhi-NCR, particularly during the winter season. According to a source apportionment study conducted by the Automotive Research Association of India (ARAI) and The Energy and Resources Institute (TERI), the transport sector contributes significantly to air pollution in the region. It accounts for 14% of PM2.5 emissions, 40% of carbon monoxide emissions, and 63% of nitrogen oxide emissions.
The study further highlights that trucks and buses contribute nearly 36% of PM2.5 emissions from the transport sector despite making up only around 3% of the total vehicle fleet. Older heavy-duty vehicles are especially polluting. A single pre-BS vehicle can emit as much pollution as 14 BS-VI compliant vehicles, while a BS-IV vehicle emits around 2.7 times more than a BS-VI vehicle.
Scheme Targets More Than Two Lakh Vehicles
The scheme is expected to benefit approximately 2.07 lakh vehicle owners in the Delhi-NCR region, including about 1.91 lakh trucks and 16,329 buses.
Under the scheme, owners of BS-III or older vehicles will be required to scrap their vehicles at Registered Vehicle Scrapping Facilities. Owners of BS-IV vehicles will have the option of either scrapping their vehicles or selling them outside the NCR region in cities and towns that are not covered under the National Clean Air Programme (NCAP).
To receive benefits, vehicle owners must purchase and register a new BS-VI compliant vehicle, a vehicle meeting stricter future emission standards, or an electric vehicle within the NCR region.
Special provisions have been made for Delhi. Light Goods Vehicles purchased under the scheme must be electric, while buses can only be BS-VI CNG-powered or electric. Government-owned vehicles are not eligible for the scheme.
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Financial Incentives for Vehicle Owners
The Central Government will provide several financial incentives to encourage participation. These include a 5% interest subvention on vehicle loans for five years, monthly fuel vouchers worth up to ₹4,800 depending on the vehicle category, and lump-sum benefits for those purchasing electric vehicles or trading Certificates of Deposit.
State governments participating in the scheme will waive registration fees and provide motor vehicle tax concessions. New vehicles may receive up to 100% tax exemption, while used vehicles can receive up to 50% tax concessions for a period of ten years. States will also waive pending liabilities associated with old vehicles that are enrolled under the scheme.
In addition, participating automobile manufacturers will offer discounts of 8% on the ex-showroom price of eligible vehicles.
The government has stated that benefits provided by the Centre will continue for five years from the registration date of the new vehicle, ensuring long-term support even after the two-year enrolment period ends.
Digital Monitoring and Governance Framework
The scheme will be implemented through an integrated digital portal that will provide real-time eligibility verification, automated processing of interest subsidy claims, fuel voucher credits, and monitoring of pollution reduction outcomes.
An Empowered Committee headed by the Cabinet Secretary will oversee the scheme’s implementation. The committee will include the CEO of NITI Aayog, senior officials from relevant ministries, and Chief Secretaries of NCR states. The Member Secretary of NCRPB will serve as the Member Convenor.
At the local level, District Collectors and District Magistrates will be responsible for implementation and monitoring, ensuring effective execution across the Delhi-NCR region.
The government expects the scheme to accelerate the transition towards cleaner transportation, reduce vehicular emissions, and contribute significantly to improving air quality in the National Capital Region.
Source: Cabinet & PIB
