The government has also decided to make DTC bus travel free for students up to the age of 21-years.
Delhi Transport Minister Satyendar Jain said though the decision to slash the fares has been taken, the Cabinet is expected to give a formal go ahead to the move following which the notification will be issued by end of this week.
Government is also planning to reduce the rate of monthly bus pass from Rs 800 to Rs 250 for non-AC buses and from Rs 1,000 to Rs 250 for AC buses.
The minister said that there will be a flat fare of Rs 5 in non-AC DTC and cluster buses while Rs 10 will be in air-conditioned buses for one month on a trial basis.
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At present, a ride in a AC bus can cost anywhere between Rs 10 to 25 while the same in non-AC buses are from Rs 5 to Rs 15.
"By slashing fares drastically, people can be encouraged to use public transport extensively. I hope that with this decision, bike users will move towards public transport. Car users is also expected to do the same," the transport minister also said.
"We are also planning to provide free travel to students of age up to 21 years so that they could be encouraged to use public transport," he also said.
The minister has directed the Transport department to submit a draft note by tomorrow on the government's move that will be put up in the Cabinet meeting.
"In order to address the situation (rising air pollution), it is imperative that lesser private vehicles are driven and more public transport is utilized.
Presently, Delhi Transport Corporation (DTC) has 4355 buses while there are 1,600 cluster buses (orange).