Schools were closed indefinitely, construction work stopped and some coal-based power plants ordered shut in New Delhi on Wednesday to protect citizens from toxic smog.
The stop to construction activities is to last until November 21, the Commission for Air Quality Management has ordered.
It has also banned trucks from carrying non-essential goods.
It comes as authorities in Delhi mull whether to follow the orders of justices and go into a wider "pollution lockdown".
That would see all non-essential travel halted and offices closed.
Millions of people will be forced to work from home if the lockdown is imposed, and it is unclear how long it might last.
Air quality in the Indian capital has been off the scale in recent weeks.
Schools were already shut for a week on Saturday to avoid children breathing the polluted air.
Delhi is ranked one of the world's most polluted cities, with a hazardous melange of factory and vehicle emissions and smoke from agricultural fires settling in the skies over its 20 million population.
The capital's chief minister Arvind Kejriwal said his government would consider the court's suggestion after consulting with stakeholders.
"Pollution lockdowns have never happened before. It will be an extreme step," he added.
Kejriwal said that construction activity would be halted for four days to cut down dust from vast, open sites.
The Central Pollution Control Board on Friday advised authorities to prepare "for implementation of measures under 'emergency' category".
It added the poor air quality would likely run until at least November 18 due to "low winds with calm conditions during the night".
On Saturday, levels of PM 2.5 particles – the smallest and most harmful, which can enter the bloodstream – topped 300 on the air quality index, 10 times the maximum daily limit recommended by the World Health Organization.
Hospitals also reported a sharp rise in patients complaining of breathing difficulties.
"We are getting 12-14 patients daily in the emergency, mostly at night, when the symptoms cause disturbed sleep and panic," Dr Suranjit Chatterjee from Apollo Hospitals told local media.
Government's pledge to clean up the city's air
Delhi's government has been vowing to clean up the city's air for years, but despite a Supreme Court ban on the burning of agricultural waste in the capital's neighbouring states – a major contributor to the city's pollution levels every winter – thousands of farmers still burn their stubble.
The number of farm fires this season has been the highest in the past four years, according to government data.
Earlier this year, the Delhi government opened its first "smog tower" containing 40 giant fans that pump 1,000 cubic metres of air per second through filters.
The €1.7m installation halves the number of harmful particulates in the air but only within a radius of one square kilometre, according to engineers.
A 2020 report by the Swiss organisation IQAir found that 22 of the world's 30 most polluted cities were in India, with Delhi ranked the most polluted capital globally.
The same year, the Lancet said 1.67 million deaths were attributable to air pollution in India in 2019, including almost 17,500 in the capital.
In recent days, the river flowing through Delhi, the Yamuna, was also choked with sickly white foam.
The city government has blamed the blight on "heavy sewage and industrial waste" discharged into the river from further upstream.