The Centre for Science and Environment said the new proposals will also improve access to public transport systems and and reduce pressure on parking space in major cities.
"Regulating these high-frequency services (taxis) for accountability and compliance is necessary for safe, reliable and affordable services," said Anumita Roychowdhury, Executive Director-Research and Advocacy at the leading advocacy group.
It has also urged state governments to adopt and implement the suggestions to control pollution and vehicular congestion.
She said these recommendations will discourage people from owning private vehicles.
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"Shared assets - using cars as taxis instead of personal vehicles - help in disincentivising private car ownership. These systems are becoming attractive globally as these help to reduce search and waiting time; bring more certainty and reliability in waiting time; and improve last mile connectivity."
The Committee on Taxi Policy Guidelines, set up by the Ministry of Road Transport and Highways, submitted its proposals last week. These suggestions push for liberal permit regime both for city taxis as well as All India Permit Tourist taxis thereby encouraging more taxis on the roads.
The new proposals permit maximum tariff of up to four times the minimum rate. They also moot reserving free parking for taxis and charging higher fee for personal vehicles.
The panel has identified growth in number of cars due to a lack of public transport as one of the main reasons for pollution. It comprised representatives from Transport Commissioners from four states and Central Pollution Control Board, Delhi Police, Ministry of Women and Child Development, NITI Aayog and Ministry of Electronics and Information Technology.