India has proposed incentives worth 885 billion rupees ($US12.4 billion) to encourage power plants to install equipment to curb emissions and to develop infrastructure for electric vehicles.
The bulk of the money would be aimed at curbing sulphur emissions from power plants, with the rest devoted to development of EV infrastructure in 70 cities over the five years to 2025.
The power ministry's plans come against the backdrop of a utilities sector under financial stress, with loans from mostly state-run lenders turning sour or requiring restructuring, according to reports this month.
Industry groups representing private companies such as Reliance Power and Adani Power, as well as state-run NTPC, had been lobbying for incentives.
India has already extended a December 2017 deadline for utilities to meet emissions standards by up to six years as power producers struggle to comply with stringent rules set out by the environment ministry in 2015.
Thermal power companies account for 80 per cent of all industrial emissions of particulate matter, sulfur and nitrous oxides in India.
