Why Delhi Is Spending ₹9,585 Crore to Replace Old Commercial Vehicles
The Centre and the Delhi government have rolled out a ₹9,585-crore fleet modernisation programme to replace ageing trucks and buses across the Delhi-NCR region, aiming to tackle one of the Capital’s biggest sources of air pollution. The two-year scheme is designed to encourage owners of older commercial vehicles to switch to cleaner BS-VI-compliant or electric vehicles (EVs) through a combination of financial incentives and tax concessions.
The initiative targets around 2.07 lakh commercial vehicles, including nearly 1.91 lakh trucks and over 16,000 buses, operating in Delhi, Haryana, Uttar Pradesh and Rajasthan. According to the government, although trucks and buses make up only a small share of vehicles on Delhi’s roads, they contribute disproportionately to harmful emissions. Within the transport sector, they account for about 36% of PM2.5 emissions, while transport overall contributes around 14% of PM2.5, 40% of carbon monoxide and 63% of nitrogen dioxide emissions in Delhi-NCR.
A major reason for the programme is the sharp difference in pollution levels between older and newer vehicles. Government data indicates that a pre-BS heavy-duty vehicle can emit as much pollution as 14 BS-VI trucks, while even a BS-IV vehicle emits nearly 2.7 times more pollutants than a BS-VI counterpart. Replacing these ageing vehicles is expected to significantly improve air quality, especially during winter when vehicular emissions worsen smog.
The scheme offers several incentives to persuade fleet owners to upgrade. The Centre will provide a 5% interest subsidy on vehicle loans for five years, monthly fuel vouchers of up to ₹4,800, and additional lump-sum benefits for buyers opting for electric commercial vehicles. Participating state governments will waive registration charges, provide up to 100% exemption from motor vehicle tax on new vehicles, reduce taxes on eligible used vehicles and waive pending liabilities on old vehicles enrolled under the scheme. Commercial vehicle manufacturers have also agreed to offer up to 8% discounts on new vehicle prices.
Under the policy, BS-III and older trucks and buses must be scrapped at authorised vehicle scrapping facilities to qualify for benefits. BS-IV vehicles may either be scrapped or sold outside the NCR to areas that are not part of the National Clean Air Programme. In Delhi, newly purchased light goods vehicles must be electric, while replacement buses will be permitted only if they are BS-VI CNG or electric. Government-owned vehicles are not covered by the scheme.
The ₹9,585-crore package includes ₹5,041 crore from the Central Government, while the remaining support comes largely through tax concessions and incentives provided by participating states. The programme will be administered through a digital portal that will automate eligibility verification, incentive payments and monitoring of environmental benefits.
Officials believe the initiative could become one of India’s largest clean mobility interventions. Besides improving Delhi-NCR’s air quality, it is expected to stimulate demand for new commercial vehicles, accelerate the adoption of cleaner technologies and reduce fuel consumption and greenhouse gas emissions. Industry leaders have welcomed the move, describing it as a significant boost for fleet modernisation while helping address one of the country’s most persistent environmental challenges.
