Anand Singh, the constable, was shot dead in outer Delhi's Shahbad Dairy area at around 9.18 p.m. while trying to catch miscreants fleeing after snatching a bag from a woman.
"Delhi government will give Rs one crore compensation to the family of police constable martyr Anand, who lost his life on duty on Friday night," a government official said.
Delhi's Deputy Chief Minister Manish Sisodia also paid tributes to the constable.
"I salute Delhi police constable Anand who lost his life while discharging his duty towards women security," Sisodia tweeted.
According to a senior police officer, the incident took place at Samosa Chowk area of Shahbad Dairy in outer Delhi.
"A PCR call was made at 9.20 p.m. about a quarrel in the area, but the constable was found critically injured with the bullet injury there," the senior police officer told IANS.
Singh, a resident of Sonipat in Haryana, had joined Delhi Police in 1988 and was presently posted in Shahbad Dairy area of the city. He is survived by his wife, mother, 22-year old son and a 19-year old daughter.
Police has registered a case and started investigations.
