Cabinet approves Rs 5,041 crore to phase out old trucks and buses in Delhi

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a landmark two-year scheme today, June 3, 2026, according to a press note. The scheme is aimed at reducing air pollution in the Delhi–NCR region and promoting cleaner mobility.

The scheme will be funded through the National Capital Region Planning Board (NCRPB) under the Ministry of Housing and Urban Affairs (MoHUA) and implemented by the Ministry of Road Transport and Highways (MoRTH) and the Ministry of Petroleum and Natural Gas (MoPNG). It will be implemented in collaboration with the participating States and Union Territories of Delhi, Haryana, Rajasthan, and Uttar Pradesh.

How much is approved for the scheme

The cabinet has approved Rs 5,041 crore funds for the scheme out of the total outlay of Rs 9,585 crore.

The scheme seeks to incentivise owners of trucks and buses registered in the Delhi–NCR region that comply with BS-IV or earlier emission norms to replace them with BS-VI or stricter emission-compliant vehicles, or electric vehicles (EVs). By accelerating the transition to cleaner transport technologies, the scheme is expected to significantly reduce vehicular emissions and contribute to improved air quality across the Delhi–NCR region.

Air pollution in Delhi

The transport sector contributes 14 per cent of PM 2.5, 40 per cent of Carbon Monoxide (CO), and 63 per cent of Nitrogen Oxide (NOx) emissions in the Delhi-NCR, as per the report on “Source Apportionment of Particulate Matter (PM 2.5 and PM 10) in the NCR” prepared by the Automotive Research Association of India (ARAI) and The Energy and Resources Institute (TERI), published in August 2018.

Trucks and buses account for 36 per cent of PM 2.5 emissions, with only 3 per cent of the total fleet. It is estimated that a single Pre-BS heavy-duty vehicle emits as much as 14 BS-VI compliant vehicles. Even a BS-IV vehicle emits 2.7 times more than a BS-VI counterpart. Hence, the newer fleet is expected to reduce vehicular pollution substantially.

How many owners to take benefit

The scheme will benefit approximately 2.07 lakh (1.91 lakh trucks and 16,329 buses) owners in Delhi-NCR (comprising Delhi, Haryana, Rajasthan, and Uttar Pradesh).

For BS‑III or older vehicles, scrapping at Registered Vehicle Scrapping Facilities is mandatory, while BS‑IV vehicles may either be scrapped or sold outside NCR in non‑NCAP cities. Owners must then purchase and register a BS‑VI or stricter norms-compliant or electric vehicle within NCR. However, in Delhi, Light Goods Vehicles purchased under the scheme must be electric, while buses must be BS‑VI CNG or electric only. Government vehicles are excluded from the scheme.

Benefits under the scheme

The Centre will provide five per cent interest subvention on loans for five years, monthly fuel vouchers worth up to Rs 4,800 depending on vehicle category, and lump‑sum benefits for EV purchases or Certificate of Deposit trading.

State governments will waive registration fees and grant up to 100 per cent motor vehicle tax concessions for new vehicles and 50 per cent for used vehicles for 10 years. State Government will also waive off pending liabilities on the old vehicles participating in the scheme.

Participating Auto OEMs will offer an 8 per cent discount on ex‑showroom prices.

"The approval of this scheme is a positive step towards accelerating fleet modernisation and cleaner mobility in the Delhi-NCR region. Aligned with our commitment to make cargo and passenger transportation greener and more efficient, we are well-positioned to support this transition through our expansive portfolio of BS-VI and zero-emission commercial vehicles, and our nationwide network of Re.Wi.Re-registered vehicle scrapping facilities. We look forward to studying the finer details of the notification to further align our efforts towards building a more sustainable and modern commercial vehicle ecosystem," commented Girish Wagh, MD & CEO, Tata Motors Ltd, on approving the scheme by the government.