Programme For Accelerated Renewal And Incentivization Of Vehicle Assets For Reducing Transport Air Pollution And Network Emissions (PARIVARTAN), 2026

Policy Update
Tanisha Hooda

Background

The PARIVARTAN (Programme for Accelerated Renewal and Incentivization of Vehicle Assets for Reducing Transport Air Pollution and Network Emissions) Scheme, 2026 is a Government of India initiative aimed at reducing vehicular pollution in the Delhi-National Capital Region (NCR). The scheme addresses emissions from ageing commercial trucks and buses, which are significant contributors to particulate matter (PM), nitrogen oxides (NOx), and other pollutants in the NCR.

Policy Rationale for a Delhi-NCR Focus: The scheme was introduced specifically for Delhi-NCR because the region continues to face severe air pollution, particularly during the winter months, with transport being a significant source of key pollutants. According to the Government of India, the transport sector contributes 14% of PM2.5, 40% of carbon monoxide (CO), and 63% of nitrogen oxide (NOx) emissions in the NCR. Within the transport sector, trucks and buses account for around 36% of PM2.5 emissions despite constituting only about 3% of the total vehicle fleet. Older heavy-duty vehicles are particularly polluting, with a single pre-BS vehicle estimated to emit as much as 14 BS-VI-compliant vehicles. These conditions created a specific need for targeted fleet modernisation in Delhi-NCR, where reducing emissions from ageing commercial vehicles can contribute substantially to improving regional air quality. (Press Information Bureau, 2026)

The Union Cabinet approved the vehicle fleet renewal initiative on 3 June 2026, which was subsequently named the PARIVARTAN Scheme. With a total financial outlay of ₹9,585 crore, including ₹5,041 crore in Central Government support, the scheme seeks to replace older commercial vehicles with BS-VI-compliant and electric vehicles (EVs). The scheme is implemented by the Ministry of Road Transport and Highways (MoRTH), with funding provided through the National Capital Region Planning Board (NCRPB) under the Ministry of Housing and Urban Affairs (MoHUA).

The scheme covers the National Capital Territory of Delhi and the NCR districts of Haryana, Rajasthan and Uttar Pradesh and targets commercial trucks and buses registered in the region that comply with BS-IV or older emission norms. Approximately 2.07 lakh vehicles, comprising 1.91 lakh trucks and 16,329 buses, are expected to be covered under the scheme. The scheme provides incentives such as Motor Vehicle Tax concessions, registration-fee waivers, interest subvention, OEM discounts (Original Equipment Manufacturers) , fuel vouchers for eligible BS-VI vehicles, and financial incentives for electric vehicles.

Through fleet modernisation and financial support for cleaner technologies, PARIVARTAN aims to reduce transport-related emissions while encouraging the adoption of cleaner and more fuel-efficient commercial vehicles. A dedicated Parivahan PARIVARTAN Portal has been established for digital registration, eligibility verification and incentive applications, with implementation involving Central and State Governments, vehicle manufacturers and other stakeholders.

Functioning

1. Operationalisation through Approved Guidelines: Following Cabinet approval on 3 June 2026, the Ministry of Housing and Urban Affairs approved the detailed PARIVARTAN Guidelines on 16 July 2026. These guidelines provide the framework for operationalising the scheme, with MoRTH as the implementing ministry and funding routed through the NCRPB.

2. State and Industry Participation: The functioning of PARIVARTAN depends on coordination between the Central Government, NCR States and vehicle manufacturers. Delhi, Haryana, Rajasthan and Uttar Pradesh have issued notifications providing a 100% Motor Vehicle Tax concession for 10 years and waiver of registration fees for eligible replacement vehicles. In addition, 15 Original Equipment Manufacturers (OEMs) have signed MoUs with MoRTH to provide discounts to eligible beneficiaries. This creates a coordinated mechanism in which government incentives are combined with industry-level price support.

3. Integrated Digital Implementation: The scheme is designed to operate through an integrated digital platform that connects multiple government and financial systems. The platform interfaces with VAHAN, the national digital system for maintaining vehicle registration and related transport records; V-Scrap, a digital module linked to VAHAN that facilitates online applications for vehicle scrapping and the issuance of certificates related to the scrapping process; and DigiELV, a digital platform that enables the trading of Certificates of Deposit (CoDs) generated after vehicle scrapping. It also interfaces with the Public Financial Management System (PFMS), participating lenders and fuel-voucher systems. This integration enables digital verification of vehicle eligibility, facilitates scrappage and financing, and supports the electronic delivery of incentives through a coordinated system, thereby improving transparency and reducing the need for manual processing.

4. Vehicle Scrappage and Certificate of Deposit Mechanism: The scheme also incorporates vehicle scrappage and Certificate of Deposit (CoD) trading into the fleet-renewal process, allowing eligible vehicle owners to access applicable benefits while transitioning away from older vehicles.

5. Financial Incentives for Fleet Replacement: The PARIVARTAN Scheme functions primarily by reducing the financial burden of replacing old commercial vehicles with cleaner alternatives. Eligible vehicle owners receive a Motor Vehicle Tax concession, registration-fee waiver, 5% interest subvention on vehicle loans, and an OEM discount of at least 8% on eligible new vehicles. The scheme also provides monthly fuel-voucher support for eligible diesel and CNG vehicles and one-time financial assistance for electric vehicles, thereby creating financial incentives for owners to shift towards cleaner technologies. In Delhi, replacement Light Goods Vehicles (LGVs) under the scheme must be electric, while replacement buses must be BS-VI CNG or electric.

Performance

As the PARIVARTAN Scheme was approved in June 2026 and launched in July 2026, sufficient post-implementation data are not yet available to assess its medium- to long-term impact. Therefore, the performance assessment uses pre-implementation trends from the VAHAN public dashboard to establish a baseline for vehicle-related activity, revenue collection and commercial-vehicle permits. These indicators provide context for assessing the scale of the vehicle ecosystem that the scheme seeks to modernise. Early implementation indicators are also considered to assess the scheme’s initial progress.

1. Vehicle Transaction Trends: The VAHAN dashboard records a steady increase in vehicle-related transactions over the 2022–2025 period. This trend provides a baseline for understanding the increasing scale of vehicle-related activity prior to the implementation of PARIVARTAN.

Figure 1: Year-wise Vehicle Transactions on VAHAN, 2022–2025

Source: VAHAN Public Dashboard, MoRTH.

Vehicle transactions increased consistently from 8.57 crore in 2022 to 10.58 crore in 2025, indicating sustained growth in vehicle-related activity. This establishes the pre-PARIVARTAN baseline against which future changes in the vehicle ecosystem can be assessed.

2. Revenue Collection Trends: Revenue collection recorded through the VAHAN system also increased during the pre-implementation period. This indicator helps illustrate the scale of financial activity associated with vehicle-related taxation and transactions.

Figure 2: Year-wise Revenue Collection through VAHAN, 2022–2025

Source: VAHAN Public Dashboard, MoRTH.

Revenue collection increased from approximately ₹7.95 lakh crore in 2022 to ₹11.09 lakh crore in 2025, reflecting an expansion in vehicle-related financial activity during the period preceding PARIVARTAN’s implementation.

3. Growth in Vehicle Permits: Vehicle permits provide a relevant indicator for understanding activity within the regulated transport and commercial-vehicle ecosystem. The VAHAN data show a substantial increase in permits between 2022 and 2025.

Table 1: Year-wise Vehicle Permits Recorded on VAHAN, 2022–2025

Year	Permits
2022	21,20,255
2023	34,30,715
2024	40,11,900
2025	47,03,323

Source: VAHAN Public Dashboard, MoRTH.

The number of permits increased from 21.20 lakh in 2022 to 47.03 lakh in 2025, more than doubling over the period. This indicates growing activity within the regulated transport ecosystem and provides useful baseline context for a policy targeting commercial fleet renewal.

4. Reduction in Stubble Burning Incidents: CAQM has reported a substantial decline in stubble-burning incidents in the NCR as part of broader air-pollution control and enforcement efforts. The available assessment compares the situation in 2025 with the 2021 baseline, providing an indicator of progress in controlling a major seasonal source of air pollution in the region.

Table 2: Reduction in Stubble Burning Incidents in NCR

Year	Stubble-Burning Incidents
2021	Baseline
2025	Approximately 92% reduction from 2021

Source: CAQM, 2025, PIB.

The approximately 92% reduction in stubble-burning incidents in NCR in 2025 compared with 2021 provides wider context on progress in addressing seasonal air-pollution sources in the region. While this is not a direct outcome of PARIVARTAN, it provides background on broader NCR air-pollution management against which the scheme’s contribution to transport-emission reduction can be assessed.

5. Early Implementation of PARIVARTAN: The scheme had registered 1,300+ beneficiaries by 27 August 2026, while 42 banks/NBFCs and 15 auto OEMs had been onboarded. This indicates that the scheme has moved from approval and guideline development towards initial implementation across Delhi-NCR.
Source: MoRTH, 2026, PIB.

Impact

1. Reduction in Vehicular Emissions: The replacement of older BS-IV and pre-BS vehicles with BS-VI-compliant and electric vehicles is expected to reduce emissions from the commercial transport sector. This is particularly significant as trucks and buses account for 36% of PM2.5 emissions from transport despite constituting only 3% of the total fleet. Moreover, a single pre-BS heavy-duty vehicle can emit as much particulate matter as up to 14 BS-VI-compliant vehicles, highlighting the potential for substantial emission reductions through fleet renewal (Press Information Bureau [PIB], 2026).

2. Improvement in Air Quality: The scheme can contribute to improved air quality in the Delhi-NCR region by targeting emissions from commercial vehicles. The transport sector contributes 14% of PM2.5, 40% of carbon monoxide (CO), and 63% of nitrogen oxides (NOx) emissions in the region (Press Information Bureau [PIB], 2026). Reducing emissions from older trucks and buses could therefore contribute to lowering transport-related pollution, particularly during periods of severe winter air pollution.

3. Transition Towards Cleaner Mobility: By encouraging the adoption of BS-VI-compliant vehicles and electric vehicles, PARIVARTAN is designed to support the transition towards cleaner mobility. The combination of financial incentives and replacement requirements reduces some of the cost barriers associated with adopting cleaner vehicles, while the focus on EVs in specific vehicle categories in Delhi can further support the shift towards low-emission transport.

4. Modernisation of the Commercial Fleet: The replacement of approximately 2.07 lakh trucks and buses can contribute to the modernisation of the commercial vehicle fleet operating in Delhi-NCR. Phasing out older, higher-emitting vehicles and bringing newer vehicles into operation can improve the overall emission profile of the fleet. The continuation of central government benefits for five years after registration also provides support beyond the scheme’s two-year enrolment period (Press Information Bureau [PIB], 2026).

5. Wider Economic and Institutional Impact: Beyond environmental outcomes, the scheme can support economic activity in the automobile and clean-mobility ecosystem by creating demand for new BS-VI and electric commercial vehicles. Its digital implementation can also improve coordination among government agencies, lenders, manufacturers and vehicle owners through automated eligibility verification and benefit delivery. However, the scale of the eventual impact will depend on the number of vehicles actually replaced and the extent to which beneficiaries adopt and continue using cleaner technologies.

Emerging Issues

1. Financing Constraints for Small Fleet Owners: The replacement of ageing trucks and buses may remain financially challenging for small fleet operators despite the availability of interest subvention, fuel vouchers and purchase incentives. Heavy commercial vehicles involve substantial upfront costs, while lenders may remain cautious about factors such as battery life, resale values and the residual demand for newer vehicle technologies. These financial and credit-related constraints could limit the ability of smaller fleet operators to participate fully in the fleet-renewal process, particularly where access to affordable financing remains limited.

2. Charging and Refuelling Infrastructure Gaps: The transition towards electric and cleaner commercial vehicles may be constrained by inadequate high-capacity charging facilities, depot infrastructure, reliable power supply and distribution capacity, particularly for heavy-duty vehicles. The Central and State Governments, along with DISCOMs, urban authorities and energy providers, should identify priority freight and bus corridors, establish adequate charging and refuelling infrastructure, and streamline approvals for depot-based charging facilities. OEMs and fleet operators can simultaneously coordinate on vehicle-specific charging requirements and deployment.

3. Risk of Incomplete Scrappage and Vehicle Re-entry: The effectiveness of fleet renewal depends on the genuine scrappage or removal of eligible older vehicles. There is a risk that vehicles sold outside NCR or scrapped under the scheme could re-enter the region through informal channels, weakening the intended emission reduction. MoRTH, State Transport Departments and registered vehicle scrapping facilities should strengthen digital tracking through VAHAN, V-Scrap and Certificates of Deposit, while enforcement agencies should conduct coordinated checks to prevent the re-entry of non-compliant vehicles.

4. Uneven Implementation Across NCR States: PARIVARTAN requires coordinated implementation across Delhi, Haryana, Rajasthan and Uttar Pradesh, including the delivery of tax concessions, registration-fee waivers and other benefits. Differences in administrative procedures or delays in providing state-level incentives could discourage eligible vehicle owners from participating. The Central Government, NCRPB and State Governments should establish common implementation protocols, monitor state-wise progress through a shared dashboard and conduct regular inter-state reviews to identify and resolve implementation gaps.

5. Measuring Actual Environmental Outcomes: Since the scheme has only recently entered implementation, the eventual reduction in PM2.5, NOx and other transport-related emissions cannot yet be established. Focusing only on the number of vehicles registered or incentives disbursed may not show whether the scheme is achieving its environmental objective. MoRTH, CAQM, State Pollution Control Boards and research institutions should establish baseline emission indicators and regularly track vehicle replacement, scrappage, vehicle kilometres travelled and emission changes, with periodic assessments used to improve the scheme’s implementation and targeting.

Way Forward

The effective implementation of the PARIVARTAN Scheme will depend on addressing the financial, infrastructural and institutional challenges that may affect the replacement and scrappage of ageing commercial vehicles. To improve participation among small and medium fleet operators, the Central Government and participating lenders could strengthen access to low-cost vehicle loans and simplify financing procedures. Financial institutions could also develop suitable credit products that account for the characteristics of newer vehicle technologies, while ensuring that interest subvention and other financial incentives are accessible to smaller operators.

Original Equipment Manufacturers (OEMs) can play an important role in supporting the transition by providing competitive discounts, flexible financing and exchange options for eligible vehicle owners. Continued OEM support can help reduce the upfront cost of replacement vehicles and address concerns relating to resale value, maintenance and the adoption of newer technologies, particularly electric vehicles. Strengthening coordination between OEMs, lenders and vehicle owners could therefore improve the uptake of cleaner replacement vehicles.

The availability of adequate charging and refuelling infrastructure will also be important for sustaining the transition towards electric and other cleaner commercial vehicles. Coordination among Central and State Governments, local authorities, fuel providers and other relevant stakeholders can help ensure that charging and refuelling facilities are developed in line with the emerging requirements of the replacement fleet. This would reduce operational constraints and support the continued use of cleaner vehicles after their purchase.

Effective implementation will further require stronger coordination among MoRTH, MoHUA, NCRPB, State Governments, lenders, OEMs, authorised scrapping facilities and enforcement agencies. Streamlining digital verification, vehicle scrappage, financing and incentive disbursement can help minimise implementation delays and improve access to scheme benefits. Regular monitoring of vehicle replacement, scrappage and incentive utilisation can also help identify gaps in implementation and assess whether the scheme is translating into actual fleet renewal.

Finally, the effectiveness of PARIVARTAN should be assessed not only by the number of vehicles enrolled under the scheme but also by the extent to which ageing vehicles are actually scrapped and replaced with cleaner alternatives. Monitoring indicators such as vehicle replacement and scrappage rates, participation of small and medium fleet operators, uptake of electric and BS-VI vehicles, utilisation of financial incentives, and the availability of supporting infrastructure would provide a stronger basis for evaluating the scheme’s contribution to fleet modernisation and emission reduction in Delhi-NCR.

References

1. Press Information Bureau (PIB), 2026, Driving the Transition to Cleaner Mobility: PARIVARTAN Scheme for Modernizing Trucks and Buses in Delhi-NCR, Government of India.
https://www.pib.gov.in/PressReleaseDetail.aspx?PRID=2291176&reg=6&lang=1

2.Ministry of Housing & Urban Affairs, 2026, MoHUA Approves Guidelines for PARIVARTAN Scheme to Accelerate Replacement of Old Trucks and Buses in NCR, Press Information Bureau, Government of India.
https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2285463&reg=48&lang=2

3.Ministry of Road Transport and Highways (MoRTH), 2026, VAHAN Public Dashboard, Government of India
https://vahan.parivahan.gov.in/vahan4dashboard/

4.Commission for Air Quality Management (CAQM), 2025, CAQM Reviews Air Pollution Control Measures, Ratifies Revised GRAP in 26th Commission Meeting, Press Information Bureau, Government of India
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2207584&reg=48&lang=2

5.Ministry of Housing and Urban Affairs (MoHUA), 2026, Cabinet approves Scheme for support to NCRPB for replacement of old trucks and buses in Delhi-NCR area, Press Information Bureau, Government of India.
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2268342&reg=3&lang=1

6.Policy Circle Bureau, 2026, Cleaner mobility scheme targets Delhi-NCR’s dirty trucks, Policy Circle.
https://www.policycircle.org/policy/cleaner-mobility-scheme-delhi-ncr/

About the Contributor:

Tanisha Hooda is a Research Intern at the Impact and Policy Research Institute (IMPRI) and a B.A. (Hons.) Economics graduate from Manav Rachna International Institute of Research and Studies (MRIIRS), Faridabad. Her research interests include competition policy, digital economy, public policy, and economic development, with a focus on analysing the socio-economic implications of emerging policy frameworks.