As published in Economic Times.

In the last decade, India has channelled substantial investments to power the electrification of our go-to means of transport—the humble bus. The bus is a crucial player in our race against the climate crisis. We have 1.4 lakh publicly owned and operated buses in India. Even if just one-fifth of these buses go electric, it could reduce 6 lakh tonnes of CO2 per year. This sparks hope.

India’s response through its schemes such as FAME I and II, and the PM e-Bus Sewa Schemes targets incentivising the public bus sector. But this strategy inadvertently overlooks a critical stakeholder—private sector bus operators. Why are they critical? The bus ecosystem in India has about 20 lakh buses with two vital players: public buses often take centre stage, but another is the private sector, which owns and operates a whopping 93% of buses in India.

Leaving the private sector out of national schemes and incentives is like playing a sport with less than 10% of the team—how can we hope to win the match against climate change without their contribution? Let’s see how we can bring them in.  

The current ecosystem—starting the game at a disadvantage

At the national level, India has set a target of 40% of new buses being electric by 2030, and introduced schemes to incentivise the procurement of e-buses. Schemes such as FAME I and II sanctioned 5595 e-buses to date, just for the public sector. The 2023 announcement of the Rs 57,613 crore PM-eBus Sewa scheme, targeting the public sector to deploy 10,000 e-buses, focuses on improving urban connectivity, particularly in cities lacking organised bus services. Yet, it neglects the involvement of the private bus sector, who tend to be the primary service providers in these cities. 

Even with these Schemes, the uptake of e-buses has been gradual in the public sector. This limitation stems from the financial instability and hesitancy to fully embrace electric buses, primarily due to concerns about insufficient grid capacity. With just 7,000 e-buses on the ground, we have a long way to go to meet the national target and the bus demand.

By 2030, the projected demand for stage-carriage non-urban buses is 7 lakhs, while the demand for urban buses is anticipated to reach 3 lakhs. Private sector buses can help fill this gap to some extent, but we still need an overall increase in bus fleets—both public and private—to meet this demand. As we look to increase these fleets, we have an opportunity to accelerate a transition to cleaner electric buses. But without any strategies and mechanisms for the private sector, we’re on the field, but we may be starting the match at a disadvantage.

Rethinking strategy to level up the playing field

Just as a coach strategically positions players on the field to seize scoring opportunities, the government must orchestrate a winning game plan by creating favourable conditions and incentives for private sector buses to transition to electric. There are multiple ways of levelling the playing field, but let’s focus on two interventions at the national level: Financial mechanisms and regulatory support to reduce upfront costs of purchasing an e-bus; Zero Emission Vehicle (ZEV) mandates to achieve economies of scale and boost the supply of e-buses.

The primary factor contributing to the private sector’s hesitancy in transitioning is the substantial up-front cost of procuring an e-bus. An electric bus costs four times as much as a diesel bus. In conversation, private operators said they would need to be within 1.5 to 2 times the cost of diesel buses to be feasible to invest. For this to happen, it is important to loop in financing institutions—banks and non-banking finance corporations (NBFCs)—to offer loans to private bus operators based on their creditworthiness, with favourable terms such as low-interest rates (4-6%), extended repayment periods (from six-eight years), and no additional collateral against the loan except for the electric bus.

Another avenue worth exploring with financing institutions is a model of leasing buses. Under this arrangement, financers can lease them, providing coverage for insurance, maintenance, and battery replacement, for at least nine years to be financially viable. Private bus operators would then be responsible for covering staff, permits, and energy costs. Furthermore, state governments should consider legalising permits to facilitate lease models where ownership and operations can be separate.

While these incentives are designed to stimulate demand for e-buses by reducing the financial barriers with their procurement, it may not be enough unless regulatory goals and a ZEV mandate are part of the plan at the national level—this can guide a winning strategy. In 2023, e-buses accounted for only about 5% of the total sales of buses. The national target is to get to 40% by 2030. A ZEV mandate can help boost this by requiring original equipment manufacturers (OEMs) to produce and sell a minimum number of ZEVs as a percentage of their total sales each year. Such a mandate would not only encourage OEMs to prioritise and produce electric buses but also play a crucial role in reducing the cost of e-buses.

If OEMs begin to manufacture more, the production cost per e-bus reduces due to economies of scale. It also allows OEMs to negotiate better prices for components and batteries, ultimately benefiting the end user. As mentioned earlier, the private sector accounts for a larger portion of the market than public buses. Demonstrating a high demand can incentivise OEMs to increase their product more aggressively, aligning with the long-term goals of the ZEV mandate.

We can learn from an example like California, which has pioneered implementing ZEV mandates, setting ambitious targets for automakers to produce and sell electric vehicles, leading to a potential 100% ZEV mandate by 2035. Since 1990, California’s ZEV program has aimed to reduce local air pollution and transition from internal combustion engine (ICE) vehicles to electric, starting with a 2% ZEV sales mandate. Despite initial hurdles, technological advancements and policy revisions, including the 2012 alignment with national greenhouse gas standards, have paved the way for a substantial rise in new EV sales, reaching 12.4% in 2021. California now anticipates achieving 100% by 2035, reflecting its commitment to addressing climate concerns and meeting net-zero targets.

In it to win it – our match against climate change 

In our race against climate change, electrifying public buses is a critical game plan, but obstacles in the form of financial struggles for STUs have slowed our momentum even with the Centre’s support. It’s time to add another tactic for the private sector, an untapped powerhouse waiting to deliver. Extending financial incentives such as lower interest rates for loans, longer loan tenure, and a leasing model can address their biggest concern of costs related to e-buses. But to guide a winning strategy, regulations such as ZEV mandates are required at the national level to increase the supply of affordable electric buses.

As the final whistle blows, the message echoes loud and clear: the only championship-winning move towards faster electrification of buses is to put together a strong team that combines the public and the private sector. 

2023 was a crucial milestone for us—ITDP completed 25 years of its journey in India! We started the last year by pausing to reflect and back at the previous year, but also going out on a limb to look ahead and envision five things we wanted to see in 2023. Here we are a year later, a year wiser. Maybe we were too ambitious, maybe we didn’t go far enough. But we hope to keep working towards these goals, and we’re in it for the long run. Let’s take stock of progress towards these goals last year: 

1 | A renewed and long-term focus on sustainable transport at the national level

In a heartening move, the national government launched the PM E-Bus Sewa Scheme in August to support the rollout of 10,000 electric buses, a huge step towards augmenting public transport systems, especially in Tier-II and Tier-III cities across the country.

As we enter 2024, we also hope to see continued progress from pioneering cities across the country which have been working on initiatives through national programmes like India Cycles4Change, Streets4People, and Transport4All Challenges. We look forward to supporting them in their efforts and hope to see renewed support at the national level for cities to scale up their initiatives. 

2 | Legislative support for safe, inclusive, and sustainable urban transport

While we’re yet to see a strong push towards this at the national level, we are heartened by some positive steps at the state level. In July, the Madras High Court ruled that all buses to be procured for the public transport fleet in Tamil Nadu should ensure accessibility for persons with disabilities. We are hopeful to see more work in this crucial area. 

We hope to work together with key stakeholders and partners this year to support the development of regulatory reforms required for various aspects of sustainable mobility, by conducting research on existing gaps in regulatory frameworks and developing recommendations.

3 | Cities embracing low emission zones for cleaner air

Many Indian cities are exploring ways to address increasing air pollution, including through restrictions on certain categories of particularly polluting vehicles. Delhi’s Graded Action Response Plan (GRAP) to address pollution includes a ban on BS-III and BS-IV vehicles. Pimpri-Chinchwad became the first city in Maharashtra to implement a GRAP, which included LEZ as a strategy to address severe pollution, in addition to improving public transport and promoting non-motorised transport and EV zones. 

ITDP India is working with Pimpri Chinchwad, as well as Pune and Aurangabad to explore strategies for implementing LEZ. We hope to see more cities embrace solutions for cleaner air in cities. 

4 | Incentives for a private sector transition to electric buses

We’re yet to see significant improvements in this area, but there have been some steps in the right direction. At the national level, the Bus and Car Operators Confederation of India (BOCI) is in discussions with NITI Aayog on the support they need for the sector to shift to e-buses. At the state level, Tamil Nadu launched a revised EV Policy in February, which included an opportunity to explore the provision of charging infrastructure as a service for private operators and avenues to encourage a faster transition to EVs for staff buses. 

Along with CEEW and SGArchitects, ITDP India organised a consultation along with Guidance, Industries Department to bring together various private sector stakeholders—bus operators, OEMs, charging infrastructure providers, and financial institutions—to provide inputs for the policy revision. ITDP India also developed a roadmap for private sector bus electrification in Tamil Nadu, identifying key barriers to electrification, with recommendations for key supply and demand-side measures required. 

In 2024, we look forward to working with BOCI at the national level. Apart from our work for private sector electrification, ITDP India will also support Tamil Nadu in implementing the state EV Policy to accelerate electrification including through regulatory reforms. To ensure a comprehensive approach to electrification in the state, we are also developing guidance for integrating charging infrastructure with parking facilities.

5 | Geospatial data leveraged for urban transformation

We have seen a growing interest in this area. The National Institute of Urban Affairs hosted the National Urban Conclave in October, with multiple sessions focused on initiatives, dashboards, and platforms to leverage data. While geospatial data is one part of the puzzle, we also identified opportunities to leverage other quantitative and qualitative data to improve decision-making. We analysed state and city-level budgets to assess the budget allocation for sustainable transport initiatives and also assessed the impact of street design projects.

We’re seeing increasing support for data-based decision-making, and we look forward to working with various stakeholders at the city and state level to strengthen these processes.

While these are some signs of progress in the right direction in these five important areas, this is not all that happened last year. With multiple city-level wins, publications, events, training workshops, and partnerships, 2023 has been a fulfilling year! Check out this photo-story of five highlights from 2023. We look forward to seeing where 2024 takes us!

Written by Keshav Suryanarayanan

With multiple city-level wins, publications, events, training workshops, and partnerships, 2023 has been a fulfilling year! 

Here’s a photo-story of five highlights from 2023: 

We look forward to seeing where 2024 takes us!

Written by Keshav Suryanarayanan
Designed by Varsha Jeyapandi

With a strong focus on improving public transport systems across India, we launched six new publications last year.

Of these, we launched four publications in collaboration with the Association of State Road Transport Undertakings (ASRTU)—the apex body for public bus operators across the country. This included two ambitious and comprehensive guidebooks—Reaching Your Riders and E-Bus Basics—and two reports on public-private partnerships and e-bus procurement in Maharashtra.

We also collaborated with the University of California, Davis on a report—Compact Cities Electrified: India—that showed that meeting India’s climate commitments will require a combination of two strategies—rapid vehicle electrification and compact cities that can accelerate a shift to less polluting modes. 

To share the insights from the report and kickstart a nationwide conversation on compact electrified cities, ITDP India presented the report at a round table on ‘Compact Cities: Pathways toward India’s Sustainable Future’ at the Urban Mobility India Conference 2023 in October. This session, anchored by the Ministry for Housing and Urban Affairs, included various key stakeholders—including national, state, and city-level officials, development banks, and technical experts.

With the National Payments Council of India and the Institute of Urban Transport, we launched a report on the National Common Mobility Card at the Global Fintech Fest in Mumbai in September 2023.

Reducing greenhouse gas emissions from transport is crucial to meet India’s climate action commitments and limit future global warming to 1.5°C. This is especially urgent amidst recurring hazardous air quality crises in Delhi, Mumbai, and other major Indian cities. The road transport sector, one of the main sources of air pollution in nearly every Indian city, requires immediate attention and action. 

A new report by ITDP and the University of California, Davis—the Compact Cities Electrified: India roadmap—shows that the solution lies in developing compact and dense cities that can shift most trips to less polluting modes like walking, cycling, and public transport while simultaneously facilitating a rapid electrification of all vehicle modes. Adopting these combined strategies could potentially save the Indian government over INR 150 lakh crore in the next 30 years and result in lower travel costs, and a reduction in projected energy demand by almost one-third, not to mention more resilient, equitable, and sustainable cities.

The study outlines four possible scenarios for the next 30 years of urban passenger transport and resulting emissions in India: 

1. Business as Usual – A continuation along India’s current trajectory toward a car-oriented society powered by fossil fuels. 
2. Mode Shift (Only):– Cities embrace compact land-use policy and redesign transport systems to make walking, cycling, and public transport use as easy as car use.
3. Electrification (Only):– Cities pursue EVs intensely and almost exclusively as the strategy for decarbonising.
4. Electrification + Shift:– Combination of high electrification and high shift. Extensive electrification of public and private vehicles and a shift in city designs to prioritise non-motorised transportation. 

The research shows that neither strategy on its own is capable of reducing emissions to a level compatible with limiting future global warming to 1.5°C. India will require both strategies—Electrification + Shift—to meet its Paris Agreement commitments and its goal of achieving Net Zero by 2070.

Why does India need Compact Electrified Cities? 

Recent air quality reports have identified India as the source of approximately 59% of the world’s increased pollution since 2013. Transport is the most rapidly growing source of emissions in the country, accounting for roughly a tenth of the overall emissions. Road transport makes up a whopping 90 percent of this, with the number of vehicles on the road increasing about four-fold since the early 2000s. 

Despite this, Indian cities persist in prioritising personal motor vehicles, consequently creating unsafe conditions for pedestrians and cyclists and inadequately meeting the demand for high-quality public transport. Addressing emissions and enhancing urban life quality in these cities is a critical need. With the United Nations projecting a near doubling of India’s urban population between 2020 and 2050, signifying nearly half of the urban areas in India will be newly built in the next 30 years. As this happens, it is especially important to avoid replicating the models of car-centric urban development. 

Investing in creating compact electrified cities will not only ensure India meets its climate commitments, but result in massive economic savings and reduced travel costs for residents of Indian cities. Over the next 30 years, the Electrification + Shift approach could generate over INR 400 lakh crore in cumulative savings, including at least INR 150 lakh crore for national, state, and city governments. This funding could be redirected to invest in critical sectors like public health and education. Additionally, combining EVs and compact cities would decrease projected energy demand by almost one-third, freeing up electricity for consumers or for other energy-intensive aspects of development.

In addition to savings and lowered energy demand, creating compact electrified cities would also facilitate economic inclusion, reduce air pollution, and minimise road fatalities.

India’s roadmap to CCE

The Compact Cities Electrified: India report provides a country-specific roadmap for India, estimating the quantities and costs of infrastructure needed for the transition and the potential impacts over the next 30 years. The report highlights seven critical goals which require strong action from governments at all levels—including ensuring every citizen gets a fair share of road space; improving walking, cycling, and public transport; and accelerating the adoption of green mobility. To check out the roadmap for India, read the full report here. 

While the scale of transformation required is massive, it is not unprecedented. Paris decreased car travel by almost 50% in 30 years by investing in other modes and traffic control strategies. Similarly, Jakarta, Tehran, and Bogotá have each built public transport systems catering to over a million riders a day in under 15 years. Indian cities have the potential to achieve this too.  

To share the insights from the report and kickstart a nationwide conversation on compact electrified cities, ITDP India presented the report at a round table on ‘Compact Cities: Pathways toward India’s Sustainable Future’ at the Urban Mobility India Conference 2023 in October. This session, anchored by the Ministry for Housing and Urban Affairs, included various key stakeholders—including national, state, and city-level officials, development banks, and technical experts. You can read more about the discussion and key takeaways in this graphic blog.

Written by Arunima Kar

Edited by Keshav Suryanarayanan

Imagine a day where taking a bus is a hassle-free experience. Routes and schedules are at your fingertips on your phones. Waiting times are shorter, and you know exactly how long you must wait for the next bus. Planning your trip requires no guesswork. Commuting is no longer a pain but something you look forward to. 

We’re one step closer to that day as we successfully wrap up Stage 2 of the Transport4All Challenge and head into Stage 3. 

Digital innovations can transform our public transport systems by equipping passengers with the right information, providing them with avenues to raise concerns, and, most importantly, getting passengers wherever they want on time, comfortably and safely. In April 2021, the Ministry of Housing and Urban Affairs and the Smart Cities mission launched the #Transport 4All🚍Challenge to bring together cities, startups, and citizens to develop digital solutions to transform public transport systems across the country. 

Stage 2 wrapped with the announcement of the top 10 winning startups who work with cities across the country to test out solutions developed by them to address eight problem statements developed by the cities in Stage 1.

Shortlisting Startups

To recap, the Transport4All Challenge was envisioned in three stages.

Stage 1

In Stage 1, we saw 46 cities conduct the country’s largest public transport data exercise with surveys with more than 2 lakh citizens, 15,000 bus drivers and conductors, and 22,000 informal public transport drivers. Based on the survey findings, cities developed more than 165 problem statements, which were then curated into 8 problem statements by the Challenge team, marking the end of Stage 1 in October 2022.

These 46 champion cities qualified for stage 2 of the challenge.

Stage 2 

In Stage 2—the Solution Generation stage—these cities worked with 70 startup applications shortlisted from over 160 applications. The goal was to create innovative and impactful digital solutions that could address the eight problem statements identified through the Stage 1 surveys.

Over the course of Stage 2, the Challenge team conducted 10+ workshops, 45+ one-on-one mentoring sessions, and 400+ calls to the startups and cities to support them in developing their solutions. The shortlisted startups proposed 45 solutions for the eight problem statements identified by the cities. 

Of these, the top 24 startups were selected by a panel of eminent experts. 

The 24 selected startups showcased their solutions to the 46 champion cities during the ‘Technological Solution Showcase’ held in August 2023. Based on the combined evaluation of the jury and the cities, the top 10 startups were declared winners of Stage 2. 

What’s next: Full speed ahead into Stage 3

In Stage 3—the Pilot Testing stage—the top 10 startups will engage with cities to pilot and refine the proposals based on citizen feedback. The Challenge team and mentors will guide the startups through this phase. The winning startups will also receive a reward of up to ₹20 lakhs based on the problem statement for completing various milestones in Stage 3 of the challenge. 

After three months of piloting, startups and cities will present the pilot results to the jury of experts for evaluation. MoHUA will showcase the successful startups and their solutions on the City Innovation Exchange (CiX) platform to enable cities to procure their product/services. 

We applaud the leadership of the Ministry of Housing and Affairs Smart Cities Mission and Urban Transport and the Association for State Road Transport Undertakings (ASRTU)—hosts for the Transport4All Digital Innovation Challenge. We thank our knowledge partner, the World Bank, for bringing their global technical expertise to digital innovation and guiding startups and cities. We also thank the technology platform partners—Cix and Startup India—for engaging with startups and providing a platform for cities and startups to collaborate efficiently. 

We look forward to working with the selected startups and cities to scale up the transformation of public transport systems across the country!

On 16th August 2023, the Chennai Unified Metropolitan Transport Authority (CUMTA) signed a Memorandum of Understanding (MOU) with the Institute for Transportation and Development Policy (ITDP). Mr.Jeyakumar, IRTS, Member Secretary/Special Officer, CUMTA, signed the MOU with Ms.Aswathy Dilip, Managing Director, ITDP India in the presence of Ms.Apoorva, IAS, the Principal Secretary to the Government, Housing and Urban Development Department. Bringing all key agencies and stakeholders related to mobility under a single roof, CUMTA ensures seamless integration and implementation of all transport projects across various modes in Chennai. 

As part of the engagement, ITDP will support CUMTA in embracing an approach of prioritising sustainable mobility—especially ensuring seamless multi-modal integration between various modes of transport; improving road safety of citizens while they use and shift between the various modes; and regulate private vehicle usage through efficient parking management.

The success of this approach requires two things—improved capacity of the city to plan and implement sustainable mobility initiatives and increased public suppport. To this effect, ITDP will provide technical expertise for projects, drawing from its experience of working with over 100 cities worldwide, and support CUMTA in facilitating workshops and knowledge exchange with local international agencies to share best practice and learnings. ITDP will also support CUMTA to develop and roll out communications and outreach activities to improve public understanding and support for these initiatives. 

This engagement is a significant milestone on the city’s journey towards building a sustainable, equitable, and inclusive transport future for all its citizens and we look forward to supporting CUMTA in their efforts.