Published: 2017-11-07 20:18:12 BdST
Delhi's Chief Minister Arvind Kejriwal said the city had once become a "gas chamber".
Schools for younger children were ordered shut on Wednesday and all outdoor activity at high schools suspended.
A thick fog that hung over the sprawling city worsened conditions. Residents complained of smarting eyes and irritation in the throat.
The air quality index, which measures the concentration of poisonous particulate matter in the air, hit the "severe" level of 451 on a scale where the maximum reading is 500 and where anything above 100 is considered unhealthy by the Central Pollution Control Board.
At the severe level, even healthy people will be affected while those who have existing diseases will be severely impacted, it said.
In some parts of Delhi, the air quality was so poor that it was beyond the maximum level, according to the US Embassy's real-time air quality index. It stood at 999 for RK Puram area beyond which no readings are available.
That level is equal to smoking 50 cigarettes a day, Dr Arvind Kumar, chairman for chest surgery at Sir Ganga Ram hospital, said.
"We are in a state of medical emergency, schools should be shut, we need to bring these levels down. We are all shortening our lives."
The Indian Medical Association urged Delhi's biggest running race, due on Nov. 19, to be called off to protect runners and volunteers from exposure to high levels of deadly particulate matter that lodge deep in the lungs.
It said the air quality is particularly poor early in the day when the race will be run.
The air quality index measures concentrations of PM 2.5, PM 10, ozone, nitrogen dioxide and sulphur dioxide among other indicators.
The air quality is likely to worsen in the next few days as a northwesterly wind is expected to bring toxic smoke from the neighbouring states of Punjab and Haryana where farmers burn crop stubble before the new planting season.
Delhi's deputy Chief Minister Manish Sisodia said emergency measures such as banning the entry of trucks into the capital and suspension of construction activity will kick in, if the pollution level rose further.
Last November, about a million children were forced to stay home from school, thousands of workers reported sick and queues formed outside shops selling face masks as New Delhi struggled with its worst pollution for nearly 20 years.
Vehicle emissions and dust from construction sites were the factors blamed for that spike, besides firecrackers and farm burnings.
Bharti Airtel, the country's top telecoms operator that sponsors the Delhi race, said it had been assured by the organisers that steps were being taken to reduce the impact of air pollution on the runners.
Salt mixed with water will be sprinkled on the entire track to ensure that dust pollution is minimal, it said. No vehicles will be allowed on the route.
But going forward, the administration would have to take steps to improve air quality, the company said in a statement.
"Air pollution poses serious health risks and it is important that these concerns are addressed urgently and appropriately by the authorities for Airtel to continue associating with the event next year and beyond," it said in a statement.