Cabinet Approves ₹9,585 Crore Scheme to Replace Old Trucks and Buses in Delhi-NCR

||Black and White Digital News||

||Parvinder Singh June 03,2026||

New Delhi : In a major step towards improving air quality and promoting cleaner transportation, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a two-year scheme to support the replacement of old trucks and buses operating in the Delhi-NCR region.

The scheme, with a total financial outlay of ₹9,585 crore, will be funded through the National Capital Region Planning Board under the Ministry of Housing and Urban Affairs and implemented by the Ministries of Road Transport and Highways and Petroleum and Natural Gas. It will be carried out in coordination with the governments of Delhi, Haryana, Rajasthan and Uttar Pradesh.

Of the total outlay, ₹5,041 crore will be provided by the Central Government, while participating states are expected to contribute an estimated ₹1,601 crore through tax concessions.

The scheme aims to encourage owners of trucks and buses registered in Delhi-NCR that comply with BS-IV or older emission norms to replace them with BS-VI or higher-emission-compliant vehicles or electric vehicles (EVs). Around 2.07 lakh vehicle owners, including 1.91 lakh truck owners and 16,329 bus owners, are expected to benefit.

According to a 2018 source apportionment study conducted by the Automotive Research Association of India and The Energy and Resources Institute, the transport sector contributes significantly to pollution in the Delhi-NCR region, accounting for 14% of PM2.5 emissions, 40% of carbon monoxide emissions and 63% of nitrogen oxide emissions. Trucks and buses alone contribute 36% of PM2.5 emissions despite constituting only 3% of the vehicle fleet.

The government noted that a single pre-BS vehicle can emit as much pollution as 14 BS-VI-compliant vehicles, while a BS-IV vehicle emits nearly 2.7 times more pollutants than a BS-VI vehicle.

Under the scheme, BS-III and older vehicles must be scrapped at registered vehicle scrapping facilities. BS-IV vehicles may either be scrapped or sold outside the NCR region in non-NCAP cities and towns. Owners must then purchase and register a BS-VI-compliant or electric vehicle within NCR.

In Delhi, light goods vehicles purchased under the scheme must be electric, while buses must be either BS-VI CNG-powered or electric. Government-owned vehicles are not eligible for the scheme.

Incentives for Vehicle Owners

The Central Government will provide:

5% interest subvention on vehicle loans for five years.

Monthly fuel vouchers worth up to ₹4,800, depending on vehicle category.

Lump-sum incentives for electric vehicle purchases or Certificate of Deposit trading.

Participating state governments will:

Waive registration fees.

Offer up to 100% motor vehicle tax concessions on new vehicles and 50% concessions on used vehicles for ten years.

Waive pending liabilities on old vehicles covered under the scheme.

In addition, participating automobile manufacturers will offer 8% discounts on ex-showroom prices of eligible vehicles.

Digital Implementation and Monitoring

The scheme will be implemented through a fully digital portal that will facilitate real-time eligibility verification, automated interest subvention processing, monthly fuel voucher disbursement and monitoring of pollution reduction outcomes.

Central government benefits will continue for five years from the date of registration of the new vehicle, extending the impact beyond the two-year enrolment period.

An Empowered Committee headed by the Cabinet Secretary will oversee implementation and monitoring. The committee will include the CEO of NITI Aayog, senior government secretaries and chief secretaries of Delhi-NCR states. At the district level, District Collectors and District Magistrates will be responsible for execution and monitoring of the scheme.

The government expects the initiative to accelerate the transition to cleaner mobility and significantly reduce vehicular emissions, helping improve air quality across the Delhi-NCR region.