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

The Union Cabinet has approved an INR 9,585 crore scheme to accelerate the replacement of older BS-IV and pre-BS-IV trucks and buses in Delhi-NCR with cleaner BS-VI and electric vehicles, aiming to reduce air pollution and promote sustainable mobility.

June 05, 2026. By Mrinmoy Dey

The Union Cabinet, chaired by the Prime Minister Narendra Modi, has approved a two-year scheme with a financial outlay of INR 9,585 crore, aimed at reducing air pollution in the Delhi–NCR region and promoting cleaner mobility.

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).

The Centre will provide 5 percent interest subvention on loans for five years, monthly fuel vouchers worth up to INR 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 percent motor vehicle tax concessions for new vehicles and 50 percent for used vehicles for 10 years. State Government will also waive of pending liabilities on the old vehicles participating in the scheme.

Participating Auto OEMs will offer 8 percent discounts on ex‑showroom prices.

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 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.

The scheme is expected to 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/towns. 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.

Implementation will be fully digital through an integrated portal, which will enable real‑time eligibility checks, automated interest subvention claims, monthly fuel voucher credits, and monitoring of pollution reduction outcomes. The benefits from the central government will continue for 5 years from the date of registration of the new vehicle, ensuring sustained impact beyond the two‑year enrolment window.

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Policies & Regulations

Union Cabinet

Scheme for replacement of old vehicles

EV transition

National Capital Region Planning Board

Ministry of Housing and Urban Affairs