The Aam Aadmi Party-led Delhi government has partnered with the University of Chicago Laboratory Schools to fund a start-up that will provide the best idea to improve air and water quality in the national capital, which is reportedly the most polluted city in the nation.

The Delhi Dialogue Commission, in collaboration with the Energy & Environment Lab at UChicago Urban Labs and the Energy Policy Institute at University of Chicago's Centre in Delhi (EPIC-India), launched the 'Urban Labs Innovation Challenge: Delhi' on Tuesday.

The idea of the 'Innovation Challenge' is to "identify innovative promising ideas to meet future energy needs while confronting the high air and water pollution".

"Organizations, agencies, students, and researchers across India with promising programs or interventions that address energy and environmental challenges in Delhi" are invited to pitch in their ideas till 1 March, 2016.

An advisory committee comprised of civic leaders, funders, policy makers, and experts in the field of energy and environment will examine the proposals and assist applicants to move up to the full proposal phase, while the selection committee comprised of Chicago and Delhi Dialogue Commission representatives will decide on the winners by Summer, 2016.

"With the technical and financial help from UChicago, the Government of Delhi will open a challenge for all citizens of the country to come forward and pilot their ideas to solve major problem of pollution on a big scale," the partnership announcement said.

"Delhi Govt will provide seed funding of Rs 2 crores for the best idea, test it and scale it up across Delhi to combat pollution," AAP government had tweeted on Monday.

The researchers of Energy & Environment Lab will work closely with the selected grantees "to design an implementation and evaluation randomized controlled trials".

University of Chicago is confident that the field-tested policy solutions will work as they were successful in reducing pollution while running the pilot project in Gujarat.

"The pilot reforms reduced pollution emission by 28 per cent, and were recently officially adopted by the Gujarat government. This is the type of result we hope to continue to foster through the Urban Labs Innovation Challenge in Delhi," another statement said.

The "Delhi Dialogue Commission" was established by AAP to come up with new and big ideas, identify best practices and policies from around the world and translate them into concrete recommendations to the Government of NCT of Delhi for transformative change.