Thick smog has blanketed the capital for days, with local and central authorities meeting to resolve the crisis.
"The pollution has gone up so much in the last 15-20 days that it is like a gas chamber outside," Delhi state chief minister Arvind Kejriwal said.
He said fireworks during the recent Diwali Hindu festival only "marginally added" to the pollution levels, which are fuelled by vehicles and trash burning.
He said it was not possible to keep the schools closed for longer than a day.
"The primary reason for the current spell is crop burning in our neighbouring states," Kejriwal added.
India's environment minister Anil Madhav Dave is expected to meet the heads of Delhi's neighbouring states next week.
"Exchanged views on taking emergency measures to curb pollution. Advised Delhi govt to implement all possible measures to improve situation," Dave said on Twitter.
New Delhi's air quality has steadily worsened over the years, a result of rapid urbanisation that brings pollution from diesel engines, coal-fired power plants and industrial emissions.
It also suffers from atmospheric dust, the burning of crop stubble in farms around the city and pollution from open fires lit by the urban poor to keep warm in winter or to cook food.
The reading for pollutants in the atmosphere breached the 1,000 microgram mark for the first time in one neighbourhood in south Delhi -- 10 times the World Health Organisation’s recommended level -- earlier this week.
A new study by UNICEF says some 300 million children live with outdoor air so polluted it can cause serious physical damage, with the situation most acute in South Asia.
