The Union Cabinet, led by Prime Minister Narendra Modi, has approved the creation of an Aviation Turbine Fuel (ATF) Price Stabilisation Fund and unveiled a comprehensive scheme aimed at reducing air pollution in the National Capital Region (NCR) of Delhi. The announcement was made by Union Minister Ashwini Vaishnaw on June 3, 2026.
ATF Price Stabilisation Fund
Vaishnaw explained that the ongoing crisis in West Asia has led to a sharp increase in ATF prices, which rose from Rs 60 per litre in March 2026 to Rs 142 per litre in May 2026. This surge has significantly impacted the aviation sector. To protect passengers, the government had previously capped ATF prices at Rs 75.6 per litre for domestic operations. However, the rising costs adversely affected oil marketing companies (OMCs), prompting the need for a sustainable solution.
The newly approved ATF Price Stabilisation Fund is designed to be self-sustaining and aims to provide stable fuel pricing to airlines. It includes a reimbursement mechanism that will be activated after the crisis subsides. The Cabinet also approved a support package of Rs 10,000 crore for OMCs to help them manage the current price volatility.
Scheme to Reduce Delhi Air Pollution
In a major step to combat air pollution in the NCR, the Cabinet approved a scheme to replace old vehicles. This initiative is expected to significantly reduce vehicular emissions, one of the primary contributors to Delhi's poor air quality. The scheme will provide incentives for scrapping old vehicles and promoting the adoption of cleaner alternatives.
Infrastructure Projects
Additionally, the Cabinet approved multiple infrastructure projects, including highway upgrades in Madhya Pradesh and Telangana, and a new coastal highway project. These projects are expected to boost connectivity, reduce travel time, and stimulate economic growth in the respective regions.
The announcements were made as part of a broader effort by the government to address key challenges facing the economy and public health, while also strengthening the country's infrastructure backbone.
