Delhi has registered 1.35 lakh coronavirus cases including 3,963 deaths.
Delhi Lieutenant Governor Anil Baijal on Friday rejected two moves by the Arvind Kejriwal government as part of the third phase of easing the COVID-19 lockdown.
Mr Kejriwal's Aam Aadmi Party government had allowed hotels to reopen from Saturday and a one-week trial for the weekly markets in the city as part of "Unlock 3".
Mr Baijal, who represents the central government and chairs the Delhi Disaster Management Authority, has ruled that these orders cannot be implemented.
The COVID-19 situation continues to be "fragile" and the threat is still "far from over" so the Lieutenant Governor has taken this decision, news agency PTI quoted sources in office as saying.
Delhi registered 1,195 new coronavirus cases on Friday, taking the capital's tally past 1.35 lakh. The number of deaths has risen to 3,963, health authorities said.
Though the capital has the third-highest caseload in the country, the Delhi government is keen to revive its economy battered by the coronavirus crisis and the following lockdown.
Reacting to Mr Baijal's move, the Aam Aadmi Party said the centre must stop interfering in decisions of the Delhi government and given that the city has now fallen to the 11th spot in active cases, it is time to focus on the economy.
"The centre derives sadistic pleasure by inflicting pain and misery on people of Delhi and undermining the democratically elected government of Delhi," AAP spokesperson Raghav Chadha said.
As a representative of the BJP-ruled centre, the Lieutenant Governor frequently vetoes moves by the Kejriwal government and the two sides have stoked a power tussle for the six years that AAP has governed Delhi, taking their feud even to the Supreme Court.
Since the beginning of the coronavirus pandemic, Mr Baijal has scrapped a number of orders pitched by the Delhi government.
Last month, he had cancelled a controversial decision to reserve hospitals except those run by the centre for residents of Delhi. He also reversed a decision to test only those showing symptoms of COVID-19 and said asymptomatic cases and high-risk contacts of a virus patient will also be tested.
Mr Kejriwal, known for his firebrand politics early in his career, has been reluctant to pick a public fight with the Lt Governor lately, saying last month: "This is not the time for politics. This is not the time for disagreements."