Delhi transport revenue dips despite rising vehicle sales

New Delhi: Delhi’s revenue collection from the transport sector fell in the last financial year, signalling a slowdown in earnings after two years of strong growth even as overall vehicle sales continued to rise.According to experts, the dip, though modest, is due to a combination of factors like GST cuts, environmental restrictions, better enforcement, vigilance, and changing behaviour patterns of vehicle owners and fleet operators.As per official data, Delhi govt earned Rs 2,986 crore from the transport sector in FY 2025–26, down from Rs 3,051 crore in FY 2024–25, a drop of about Rs 65 crore, or 2.1%. This follows a period of robust growth -- revenues rose from Rs 2,693 crore in FY 2022–23 to Rs 3,006 crore in FY 2023–24, a jump of 11.6%.Vehicle sales, however, showed steady growth during the same period, increasing from 2.6 lakh in 2022–23 to 2.8 lakh in 2023–24 and 2024–25, and surpassing 3 lakh in 2025–26. Despite this overall increase, the number of commercial vehicles, such as taxis, fell sharply, from about 83,000 in 2022–23 to nearly 75,000 in 2025–26, underscoring challenges in commercial vehicle registration, a key revenue source due to higher taxes.

Experts noted a growing trend of commercial vehicles operating in the capital without being registered in Delhi. Other contributing factors include the rise in electric vehicle sales and GST reductions, which lowered revenue collection.Amit Bhatt, India MD at International Council for Clean Transportation, said the GST cut played a dual role, contributing to both lower revenue and higher sales. Effective Sept 22, 2025, India reduced GST rates for small cars, motorcycles (up to 350cc) and commercial vehicles to 18% from 28% plus cess, aiming to boost sales of affordable passenger vehicles.

The impact was immediately visible during the festive season, with vehicle registrations in Delhi hitting an all-time high in Oct.

Registrations reached 1,14,074, a 30% jump from 87,983 in Oct 2024, driven by Dussehra, Durga Puja, Dhanteras and Diwali celebrations.Anil Chhikara, faculty member at Asian Institute of Transport Development, noted many commercial vehicles are being registered in other states due to stricter regulatory norms in Delhi.

“Most of the buses in Delhi are registered in Rajasthan, Haryana or UP,” he said, adding that road tax is a major revenue source, which is minimal for e-vehicles.Beyond registration, the transport department also earns from fitness certificates, fitness penalties and parking fees. Following the closure of the Burari fitness centre for a brief period, the Jhuljhuli centre experienced long waiting times, prompting commercial vehicles to seek fitness certification in other states.

“This also impacted earnings,” Chhikara said.Industry insiders said buses, taxis and app-based aggregator vehicles increasingly obtain registrations outside Delhi to avoid compliance requirements, despite Delhi being the primary area of operation. A senior official said it is mandatory for commercial vehicles in Delhi to limit maximum speed to 80-90 kmph. “Rules are stricter compared to other states, making it difficult to manipulate fitness or other certificates,” he said.