Centre's ₹9,585-cr green scheme for NCR may boost CV replacement demand

The two-year programme aims to replace over 2 lakh ageing trucks and buses across Delhi-NCR through interest subsidies, tax waivers and manufacturer discounts

The Union Cabinet on Wednesday approved a ₹9,585 crore scheme to replace ageing trucks and buses in the Delhi-National Capital Region (NCR), in what could become one of India's largest targeted clean-mobility interventions and create a sizeable replacement opportunity for commercial vehicle (CV) manufacturers.

 

The two-year programme, to be implemented through the National Capital Region Planning Board (NCRPB), seeks to incentivise owners of BS-IV and older trucks and buses to switch to BS-VI-compliant or electric vehicles (EVs). The Centre estimates that about 2.07 lakh vehicles — 1.91 lakh trucks and 16,329 buses — could potentially be covered under the scheme across Delhi, Haryana, Rajasthan, and Uttar Pradesh.

 

For the CV industry, the move could open up a sizeable replacement market at a time when fleet operators are facing rising compliance requirements and pressure to improve operating efficiency.

 

The scheme combines multiple incentives. The Centre will provide a 5 per cent interest subvention on vehicle loans for five years, monthly fuel vouchers of up to ₹4,800 depending on vehicle category, and additional benefits for EV purchases. Participating state governments will waive registration fees and provide motor vehicle tax concessions, while automobile original equipment manufacturers (OEMs) have committed to offering discounts of up to 8 per cent on ex-showroom prices.

 

The scheme provides for up to 100 per cent concession in motor vehicle tax for new replacement vehicles and up to 50 per cent concession for used replacement vehicles for a period of 10 years. It also envisages waiver of pending liabilities on the old vehicles being replaced, subject to state government approval.

 

The policy also signals a tightening regulatory stance on older commercial vehicles in one of India's most-polluted regions. Under the scheme, BS-III and older vehicles must be scrapped at authorised facilities, while BS-IV vehicles can either be scrapped or sold outside NCR in non-National Clean Air Programme towns before replacement. Owners must subsequently register a cleaner vehicle within the region.

 

Government-owned vehicles are excluded from the scheme.

 

For truck makers such as Tata Motors, Ashok Leyland, and Eicher Motors' Volvo Eicher Commercial Vehicles, the programme could help accelerate fleet modernisation in a market where a large share of heavy-duty vehicles continue to operate beyond their optimal lifecycle.

 

Bus manufacturers and CNG vehicle makers may also benefit, particularly in Delhi where replacement buses will have to be either BS-VI CNG or electric.

 

"The approval of this scheme is a positive step towards accelerating fleet modernisation and cleaner mobility in the Delhi-NCR region," said Girish Wagh, managing director and chief executive officer, Tata Motors.

 

Wagh said Tata Motors was well positioned to support the transition through its portfolio of BS-VI and zero-emission CVs, as well as its nationwide network of Re.Wi.Re (recycle with respect)-registered vehicle scrapping facilities.

 

"Aligned with our commitment to make cargo and passenger transportation greener and more efficient, we are well positioned to support this transition," he said, adding that the company would study the finer details of the notification to further align its efforts towards building a more sustainable and modern commercial vehicle ecosystem.

 

The scheme also reinforces the government's broader policy direction of using targeted incentives to achieve air-quality goals. According to the government, trucks and buses account for 36 percent of PM 2.5 emissions from the transport sector despite representing only about 3 per cent of the vehicle fleet. A pre-BS vehicle can emit as much pollution as 14 BS-VI vehicles, highlighting the environmental gains policymakers expect from fleet renewal.

 

The Centre will contribute ₹5,041 crore towards the scheme, while the remaining support will come through state-level incentives and discounts offered by vehicle manufacturers.

 

Beyond the immediate replacement opportunity, the initiative could serve as a template for other highly polluted urban clusters if the Delhi-NCR programme demonstrates measurable reductions in emissions and successful adoption of cleaner CVs.