"This will help in encouraging fuel efficient, environment friendly vehicles, thereby reducing vehicular pollution and oil import bill," Sitharaman said.
Around 10% of the 3.7 million trucks and 5% of the 5.2 million cars on Indian roads could be eligible for voluntary scrapping.
India, a signatory to Paris Climate accord, will also launch a Hydrogen Energy Mission in the next fiscal year to March 2022 for generating hydrogen from green power sources.
Gas Transport System Operator will be set up for facilitation and coordination of booking of common carrier capacity in all-natural gas pipelines on a non-discriminatory open access basis.
The indexes recovered from a pandemic-induced plunge in March last year to finish 2020 around 15% firmer, their best performance since 2017, fuelled by strong foreign inflows amid massive liquidity in global markets and vaccine hopes.