The Union Cabinet has approved a ₹9,585 crore scheme aimed at accelerating the replacement of older trucks and buses in the Delhi-NCR region with cleaner BS-VI and electric vehicles. The initiative is part of the government’s broader strategy to reduce vehicular emissions and improve air quality in one of India’s most polluted regions.
Of the total outlay, ₹5,041 crore will be funded by the Central government, while participating state governments are expected to provide tax concessions worth approximately ₹1,601 crore. The scheme will be jointly implemented by the Ministry of Road Transport and Highways (MoRTH), the National Capital Region Planning Board (NCRPB), and the governments of Delhi, Haryana, Uttar Pradesh and Rajasthan.
Commercial vehicle owners operating BS-IV and older trucks and buses registered in Delhi-NCR will be eligible for incentives when replacing their vehicles with BS-VI-compliant or electric models registered within the NCR. The programme is expected to cover more than 1.9 lakh trucks and around 16,000 buses currently operating in the region under BS-IV and older emission norms.
To streamline implementation, the scheme will be managed through a fully digital platform capable of conducting real-time eligibility checks, processing interest subvention claims, crediting fuel vouchers, and monitoring pollution reduction outcomes.
According to the government, older diesel commercial vehicles remain a major source of air pollution in the NCR. Vehicles meeting BS-I to BS-IV standards emit approximately 67% more carbon monoxide and 97% more particulate matter compared to BS-VI vehicles.
The incentive package includes a 5% interest subvention on vehicle loans for five years, monthly fuel vouchers of up to ₹4,800 depending on vehicle category, and lump-sum incentives for electric vehicle purchases or Certificate of Deposit trading. In addition, participating vehicle manufacturers will provide an 8% discount on the ex-showroom price of replacement vehicles.
For BS-III and older vehicles, scrapping through a registered vehicle scrapping facility will be mandatory. Owners of BS-IV vehicles will have the option of either scrapping their vehicles or selling them outside the NCR in non-NCAP cities and towns before purchasing a replacement vehicle.
Under the scheme, light goods vehicles purchased in Delhi must be electric, while buses will qualify only if they are BS-VI CNG-powered or electric. Government-owned vehicles have been excluded from the programme.
The Centre has also urged participating states to offer a 100% exemption on motor vehicle tax and waive registration fees for new replacement vehicles. Buyers of used BS-VI vehicles under the scheme will receive a 50% concession, with these benefits remaining valid for up to 10 years.
Announcing the decision, Information and Broadcasting Minister Ashwini Vaishnaw said the programme is designed to modernise the commercial vehicle fleet operating in Delhi-NCR while encouraging the adoption of cleaner transportation technologies.
With Delhi-NCR continuing to face severe air pollution challenges, particularly during winter months, the scheme is expected to play a significant role in reducing emissions from the transport sector and accelerating the transition toward cleaner and more sustainable mobility solutions.
