Context:

• The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a two-year scheme aimed at reducing air pollution in the Delhi-NCR region and promoting clean transportation.

Key Highlights:

• Budget Allocation: ₹9,585 crore
• Central Contribution: ₹5,041 crore as direct financial assistance
• States’ Contribution: Approximately ₹1,601 crore through tax concessions by participating states

Associated Ministries:

• Financed by: National Capital Region Planning Board (NCRPB) under the Ministry of Housing and Urban Affairs (MoHUA)
• Implemented by: Ministry of Road Transport and Highways (MoRTH) and Ministry of Petroleum and Natural Gas (MoPNG) jointly
• Target Area: Delhi and the four NCR states/Union Territory—Delhi, Haryana, Rajasthan, and Uttar Pradesh
• Primary Objective: Replacement of approximately 2.07 lakh commercial vehicles registered in Delhi-NCR that comply with BS-IV or older emission standards (1.91 lakh trucks and 16,329 buses) with BS-VI-compliant or Electric Vehicles (EVs)

Scrappage and Replacement Rules:

• BS-III and Older Vehicles: Mandatory scrapping at Registered Vehicle Scrapping Facilities (RVSFs).
• BS-IV Vehicles: May either be scrapped or sold outside the NCR region (to non-NCAP cities/towns).
• Special Rule for Delhi: All Light Goods Vehicles (LGVs) purchased under the scheme must be electric, while buses must be either BS-VI CNG or electric.
• Exemption: Government-owned vehicles are excluded from the scheme.

Major Incentives for Vehicle Owners:

• Interest Support: 5% interest subvention on loans for new vehicles for a period of five years.
• Fuel Coupons: Monthly fuel vouchers of up to ₹4,800 depending on vehicle category.
• State-Level Concessions: Up to 100% exemption on motor vehicle tax for new vehicles and 50% exemption for certified old vehicles for ten years, along with waiver of registration fees. Outstanding liabilities of old vehicles will also be waived.
• Automobile Industry Discount: Original Equipment Manufacturers (OEMs) will provide an 8% discount on the ex-showroom price of new vehicles.

Other Important Facts:

• Source of Pollution: According to the 2018 reports of the Automotive Research Association of India (ARAI) and The Energy and Resources Institute (TERI), the transport sector contributes 14% of PM2.5 pollution, 40% of carbon monoxide (CO), and 63% of nitrogen oxides (NOx) emissions in Delhi-NCR.
• Disproportionate Impact: Heavy commercial trucks and buses account for only 3% of total vehicles but contribute 36% of PM2.5 emissions generated by the transport sector.
• Emission Difference: One old pre-BS heavy vehicle emits pollution equivalent to 14 modern BS-VI vehicles. Even a BS-IV vehicle emits 2.7 times more pollutants than a BS-VI vehicle.
• Digital Governance and Transparency: The scheme will be implemented entirely through an integrated digital portal, enabling real-time eligibility verification, automated claim settlement, and monitoring of pollution reduction outcomes.