The award carries USD 1,00,000 prize money, and this year's winners, NGOs Goonj and Chintan were selected from a total of 135 entries from all over Delhi.
Based in south-east Delhi's Madanpur-Khadarpur village area, Goonj, formed in 1999, works on the issues of urban waste and social distribution.
"It believes in utilising vast quantities of untapped old and waste material in middle class households and re-using material to create second-hand products," the jury described the award-winning entry.
The other winner, Chintan, through its Material Recovery Facility (MRF) at the New Delhi Railway Station manages tonnes of unsorted garbage from the numerous trains that arrive at the railway station everyday.
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"The garbage that would end up in landfill dumps outside the city is sorted into organic and non-organic waste by trained workers at the centre.
"The project demonstrates that with process innovation and courageous partnership building...Urban waste management in a mega city like Delhi is both possible and urgent," they said.
Among the other nine entries included Aga Khan Trust for Culture (AKTC) Nizamuddin urban renewal initiatives, DDA's Yamuna Biodiversity Park, Delhi Haat, Katha labs - education and self-employment and Khoj art foundation.
Centre for Social Research (CSR) and Centre for Urban and Regional Excellence (CURE), Sawda Ghevra known for its 'Potty Project' were other entries.
The awards are given annually for initiatives within a specific city that utilise partnership to improve the quality of life and urban environment.