The government has also approved another recommendation of the fare revision committee on the base fare.
The meter-down charge of Rs 25 for first two kilometres has been revised to Rs 25 for 1.5 kilometres, said Transport Minister Kailash Gahlot.
"The revised rates will be implemented after the Transport Department's notification and recalibration of fare meters. I will write to the department for issuing a notification for implementation of the cabinet decision with immediate effect," Gahlot told reporters.
The existing fare is Rs 8 per km, which was recommended to be raised to Rs 9.5 per km by the fare revision committee. It will be a 18.5-per cent hike in auto fares in the national capital.
The auto fares were last revised by the then Sheila Dikshit government in 2013.
In reply to a question, the transport minister said that no approval by the Lieutenant Governor was needed since fare revision was not a "reserved" subject.
A large section of auto-rickshaw drivers vehemently backed the ruling Aam Aadmi Party, first in its maiden election in December 2013 and then in February 2015.
However, a section of the auto drivers gradually became disenchanted over various reasons, including non-revision of auto fares and no check on cab aggregators.
This was evident after the AAP fared way below its expectations during the civic polls in 2017.
The move is being viewed to woo back its vote bank. The transport minister said fares of other modes of public transport such as Gramin Sewa, eco-friendly Sewa among others, will also be revised later on.
Sources, however, claimed that the transport department cannot issue notification for fare revision without the approval of the Lt. Governor.
"This has also been pointed out by the law department of the Delhi government," one of the sources said.
They also claimed that recalibration of auto fare meters will be a "tedious" process since there are "no arrangements" in place to attend the large number of autos in the city.
Gahlot termed the hike as "marginal" comparing it with prevailing auto fares in Mumbai.
"In Mumbai, the per km fare is Rs 12.2. So, it's nominal hike in comparison," he said.
The committee has also recommended increase in waiting charges from current 50 paise per minute to 75 paise per minute, besides removing the cap of minimum wait of 15 minutes.
Rs 30 per hour (50 paise per minute) is currently chargeable when an auto is completely stationary after first 15 minutes.
As per recommendation of the committee, waiting charge of 75 paise per minute will be applicable if an auto is kept waiting by the passenger, or it's stuck in traffic, or moving at a speed of less than 6 km per hour during heavy traffic.
The existing night and luggage charges have been maintained by the committee.
As per transport department figures, there are around 90,000 autos plying on the national capital roads.
The 11-member auto fare revision committee was formed by the Delhi government in November last year.