Tamil Nadu’s 2026-27 Budget Puts Streets, Buses and Charging on the Agenda

16th September 2026 by admin

The Tamil Nadu Chief Minister, C. Joseph Vijay, announced the state’s latest budget on August 05 and has unravelled what’s being called a new chapter for urban mobility taking shape in Tamil Nadu.

The 2026–27 budget is being called a pioneering one for sustainable mobility, for not one, but two of its significant announcements. Firstly, the Chief Minister’s Integrated Urban Development Mission (CMIUD), has 11 sub-missions, includes the City Roads, Mobility and Transport as a dedicated sub-mission within a five-year framework. With ₹2,117 crore allocated this year and recurring funding envisioned, mobility gets a more focused place in the state’s urban development agenda. Municipal Administration and Water Supply (MAWS) also ranked as the third highest-funded department of this year’s budget with a ₹29863 Crore allocation – a 12% increase compared to last year’s ₹26678 Crores, following School Education and Rural Development departments.

The shift is also clear in the state’s approach to electric mobility. For the first time, the budget has committed dedicated funding for public EV charging, with ₹50 crore allocated this year with a target of having 20,000 charging stations over five years.

Alongside this, the investments in 1,000 AC e-buses for Chennai and charging infrastructure at MTC depots, the message is clear: Tamil Nadu is putting money behind a cleaner, more people-centred urban mobility future.

Interestingly, it is not just the budget, this shift towards a sustainable mobility future is being reflected even in the MAWS policy note, which mentions concepts like complete streets, further reiterating that the state is walking the talk. The Vetri Tamizhagam Vision 2031, which is similar to a state-wide vision document, reinforces this direction, calling for citizen-friendly roads with footpaths, cycle tracks and storm water drains, alongside urban greening, climate resilience, and improved public transport infrastructure.

Here are some of the key highlights from the budget that reiterate this

Healthy Streets

Key highlights:

The Chief Minister’s Integrated Urban Development Mission – A 5-year umbrella mission with a current financial year outlay of ₹2,117 crore. The 11 sub-missions are:

City Infrastructure Development Plan.
Urban Water Supply.
Urban Underground Sewerage.
Integrated Solid Waste Management.
City Roads, Mobility and Transport.
Urban Greening, Recreation and Open Spaces.
Urban Water Bodies Development.
Social Infrastructure.
Safety and Security Mission.
Digital Urban Governance.
Public Health Mission.

Why we are glad: Unlike traditional budgets in which urban investments are fragmented across departments and schemes, this year’s mission recognises that cities function as interconnected systems. Integrating transport, water, public spaces, and governance under a single programme creates opportunities for more coordinated planning and implementation. If operationalised well, this mission could improve project delivery while reducing duplication across agencies.

2. a. People-friendly streets – The Chief Minister’s special announcement highlighted a dedicated budget of ₹165 Crores for this financial year to implement People-friendly streets initiatives across all municipal corporations excluding Chennai. This will include, transforming streets into modern urban thoroughfares with proper road connectivity, dedicated pedestrian pathways, separate cycling lanes, well-connected cross-streets, junction improvements, safe school access networks, and modern LED street lighting.

b. What’s in it for Chennai: This year, two special announcements were additionally made by the hon. Chief Minister,

Safe Routes to Schools: Piloting safer, child-friendly streets across Tondiarpet, Royapuram, Washermenpet and K.K. Nagar.
Improvement of Traffic Islands/Junctions: 105 junctions to be transformed in Chennai under this initiative.

These will be executed with a dedicated budget of ₹110 Crores for this financial year.

It may be noted, under the overarching theme of “People-Friendly Modern Streets” the Greater Chennai Corporation is already pioneering the following initiatives,

200 km of footpaths: Expanding the pedestrian network to strengthen intra- and inter-neighbourhood connectivity, alongside parking management and transit integration.

Complete Streets: Transforming streets across six key neighbourhoods with World Bank support under the Chennai City Partnership.

Why we are glad: Last year, we noted that walking and cycling infrastructure have always received short shrift, but this year’s budget changes that, not only for metropolitan cities in Tamil Nadu but for all municipal corporations. This is a truly encouraging shift that prioritises the silent majority of street users who walk or use public transport for their daily commute.

What we recommend: Measurable targets and best-practice standards at the State level for planning, design, and implementation of these initiatives will be important to ensure that these commitments translate into high-quality streets across cities.

3. Performance-based Maintenance Contracts and Namma Salai app: A dedicated allocation of ₹250 crores have been earmarked for Operations and Maintenance of roads. Encouraging user ownership, this announcement comes along with the ‘Namma Salai’ mobile application, where citizens can report any road repairs to enable prompt rectification.

Why we are glad: Operations and Maintenance, which is often a second thought, has become a priority line item in the State budget. Pre-defined Key Performance Indicators (KPIs) ensures greater accountability, quality implementation/restoration standards thereby lowering lifecycle costs of road assets.

What we recommend: Roads often mean only carriageways. What we would like to see is regular maintenance of walking and cycling infrastructure (footpaths and cycle tracks), above-ground utilities (pillar boxes, streetlights, uneven manhole levels, hanging cables, street furniture etc.), which form an integral part of our Right of Way (RoW). Standardised KPIs shall be created specifically for these street elements to track maintenance measures and ensure that they are also timely repaired and well- maintained.

Climate resilience becomes urban and public infrastructure in this budget:

Greening and Beautification as a part of CM’s Integrated Urban Development Mission: To expand Chennai’s green canopy and create people-centric public spaces, footpaths along major routes, and residential zones will also undergo greening and beautification.
Blue-green infrastructure: Projects around Chennai’s water bodies to mitigate urban flooding, protecting environmental resources while creating sustainable spaces for community use.
Cooum and Adyar river restoration: Global tenders and DPR for river rejuvenation, with boating facilities, riverfront promenades, and recreational spaces.

Why we are glad: The budget recognises that climate resilience is increasingly inseparable from urban development. By integrating it into mainstream urban investments like streets and public space improvements, Tamil Nadu moves beyond conventional engineering approaches towards more nature-based solutions that can improve flood resilience, public health, and urban liveability.

What we recommend: While these are significant policy commitments thought through a climate resilience intersectionality lens, mobility and street design should also be integrated. We’d like to see these translate into street-level specifics: minimum tree canopy cover along footpaths and cycle tracks as a heat-mitigation standard, and stormwater drainage channels built into every road/access created for the blue-green infrastructure. Attaching dedicated, published allocations to each of these announcements will also be key to timely, accountable delivery.

EV Charging

EV Charging Infrastructure Rollout: ₹50 crore has been allocated in 2026-27 towards developing public EV charging stations, with a target of establishing 20,000 public EV Charging Stations across Tamil Nadu over the next five years.

Why we are glad: Charging availability is one of the biggest factors shaping EV adoption, and a clear five-year target signals a strong, sustained commitment to building out that network at scale. A wider public charging network also goes a long way in easing range anxiety – the hesitation many potential EV buyers feel about running out of charge with nowhere nearby to top up – making EVs a more confident, practical choice for everyday use. Setting a public, numeric goal like 20,000 stations gives citizens, industry, and charge point operators a concrete benchmark to plan around, rather than incremental, unclear expansion.

What we recommend: As the rollout progresses, publishing a phased plan will make the five-year journey easy to follow. This plan could cover districts and corridors which are to be prioritised first, explore how urban versus highway placement is sequenced, and what charger types (based on the interoperability standards and charging rate) are deployed where.

Residential EV Charging Incentive: ₹5 crore has been earmarked to incentivise the installation of EV charging stations. This supports Resident Welfare Associations (RWAs) in setting up charging infrastructure within housing societies and apartment complexes.

Why we are glad: This initiative recognises that public charging infrastructure alone isn’t enough, a lot of EV charging naturally happens at home, overnight. By supporting RWAs directly, the government is making it easier for EV owners living in apartments and gated communities to access convenient charging where they live.

What we recommend: Creating a simple, standardised process and platform for RWAs to apply for and access this incentive would help more housing societies take it up smoothly. Sharing a few early success stories or model implementations from participating RWAs could also help other communities see how straightforward the process can be, encouraging wider adoption across the state.

Public Transport

State Transport Undertaking (STU) subsidies and performance-linked funding: The budget provides a total allocation of ₹13,561 crore for the Transport Department. Within this, ₹7,675 crore in allocated for operating subsidy to STUs statewide, along with ₹2,650 crore in performance gap funding, and ₹1,005 crore as share capital assistance.

Why we are glad: What stands out here is the structure of the funding, not just the total. Separating an operating subsidy (₹7,675 crore) from the performance gap funding pool (₹2,650 crore) points toward outcome-linked support. This kind of disaggregation is useful because it makes it possible to track whether STUs are meeting service targets and to direct funding, accordingly, adding a layer of accountability alongside the base subsidy.

What we recommend: For performance gap funding, publishing the specific metrics used to define the “gap” – such as occupancy, route coverage, or fleet efficiency – would help make the outcome-linked intent of this funding fully visible and give each STU clarity on what improvements are being recognised and supported.

For share capital assistance, structuring allocations around each STU’s actual capital needs such as fleet age, planned route expansion, or procurement targets would help the funding go further. Pairing both funding streams with a simple, public utilisation update showing funds released and used over the year would help showcase the impact of this investment as it reaches STUs across the state.

MTC Chennai: 1,000 electric buses for Chennai and a Gross Cost Contract ( GCC) model: The Budget commits to 1,000 new air-conditioned electric buses for Chennai’s Metropolitan Transport Corporation (MTC), procured and operated under GCC model, where private operators are paid per kilometre operated. Furthermore, a dedicated ₹500 crore has been earmarked for depot infrastructure to support this expanded electric fleet.

Why we are glad: A fleet order of this scale, 1,000 buses in a single commitment, is a meaningful step toward decarbonising Chennai’s public transport and improving air quality across the city. Pairing the vehicle order with an upfront, dedicated depot infrastructure allocation is especially welcome: charging bays, grid connections, and maintenance yards are what determine whether an electric fleet runs reliably day to day, and developing this requires large investments. Funding them alongside the buses sets the rollout up to work in practice.

What we recommend: Depot selection could weigh proximity to high-frequency routes, grid capacity near substations and available land for charging and parking requirements. A mix of greenfield and brownfield depots would help – greenfield sites accommodate future network expansion, while upgrading brownfield depots lets the rollout prioritise existing high-demand routes early on.
Strict service-level KPIs are best written directly into the GCC tenders. On route selection, underserved corridors depend on opportunity-charging infrastructure at layover points, not just the depot, so full coverage may need to be phased – starting with routes ready today while charging infrastructure is extended to underserved areas over time.

Diesel to Electric Bus Conversion: Around 100 diesel buses belonging to MTC Chennai, approximately 7 years old and in good condition, will be converted into electric buses and operated under the GCC Model. The necessary charging facilities and electrical infrastructure will be established at the depot, at an estimated cost of ₹13.6 crore.

Why we are glad: Retrofitting existing, well-maintained buses into electric ones is an efficient way to go electric faster, it makes use of buses already in good shape while still delivering the emissions and air quality benefits of going electric. Alongside the depot-level charging and electrical infrastructure investment, this shows a practical, infrastructure-ready approach to expanding the electric fleet.

What we recommend: Once these buses are running, sharing how they perform in terms of range, charging time and maintenance needs comparing to newly manufactured electric buses would be valuable in assessing conversion as a scalable model for the rest of the fleet. If it does, a clear plan for scaling up conversions across other ageing-but-serviceable buses in MTC’s fleet could offer a cost-effective complement to new electric bus procurement.

Special Buses for School Students: Special buses will operate during peak morning and evening hours for school students in rural, hilly, and interior areas where public transport service is currently inadequate. These buses will serve 140 schools, benefiting approximately 19,000 students.

Why we are glad: This targets some of the hard-to-reach areas for public transport – rural, hilly, and interior regions, where students often face the biggest gaps in safe, reliable commuting options. Addressing this at the student level also has a ripple effect on families, easing the burden on parents who might otherwise need to arrange or accompany daily commutes themselves.

What we recommend: Ensuring safe, walkable access to bus stops – especially in hilly terrain where road conditions can be challenging – would help students reach these buses safely on both ends of their commute. Reliability will also be key, since these buses need to align closely with school start and end times; clear, consistent scheduling would help both students and parents plan their day with confidence.

With inputs from Varsha Vasuhe, Janani V, Vedavalli, Bezylal Praysingh, Sooraj EM, Venugopal AV
Edited by Donita Jose

Less Carriageway, Less Parking, Higher Costs. Debunking the Myths around PCMC’s Harit Setu Project

4th September 2026 by admin

Harit Setu in Pimpri Chinchwad is a one-of-a-kind streets project that moves away from the usual approach of pedestrianising isolated roads. Led by the Pimpri Chinchwad Municipal Corporation, it is designed to create accessible neighbourhoods with safer, more efficient, and a network of well-connected streets, while establishing new green links in the city. Harit Setu is also India’s first active mobility project to be financed through municipal green bonds, making it the city’s most ambitious investment towards Non-Motorised Transport (NMT) so far.

In Pimpri Chinchwad’s locality of Pradhikaran, the project pilot has transformed 20 km of streets. Residents now use these streets for their morning and evening walks; grandparents stroll with their grandchildren; and children have more space to walk and cycle on the way to school. What was once just a road has slowly started becoming a public space.

*Photo 1: A stretch of Pradhikaran redone under Harit Setu*

But despite its pioneering vision and positive impact, the project has received mixed responses. Since work began in 2024, concerns about its Rs 200-crore budget and claims about wide footpaths reducing space for vehicle movement have sprung up in public discourse.

On a rainy September afternoon, two colleagues at ITDP India, Tejesvini and Rutuja, set out to unpack the curious situation of Harit Setu: a people-centric streets project that has left some local residents with more questions than answers.

Tejesvini (TJ): Why was this streets project not welcomed by a few? And what can other Indian cities learn from this as they pursue similar efforts?

Rutuja (RN): Okay…these are loaded questions! Let’s start with the first one.

It is understandably difficult for some people, who might have used these streets in a certain way for decades, to adapt to this change. But have you noticed that three concerns seem to come up repeatedly in every Harit Setu discussion? Some say that footpaths are unnecessarily wide and have taken away road space, some claim that parking has been sacrificed, and many call this just an expensive beautification project.

TJ: Yes, I’ve noticed it too, and I kind of get where they are coming from! At the outset, this project can seem like only a cosmetic exercise with improved streetlights, street furniture, and wide footpaths. But there is more to the picture than this, no?

RN: Exactly, there is! Every street element has a purpose, and we have the data to back this up. I’ll take you through them one by one.

TJ: Okay, let’s start with the one criticism that seems to come up the most often.

Claim 1. “The carriageway has become narrower because of wide footpaths”

RN: Yeah, this is an interesting one. If you look at the street conditions before and after the transformations, the whole story changes. Take Babasaheb Ambedkar Road for instance. Earlier, there were stretches of the road with no continuous footpaths. Other stretches were partially occupied by food vendors. Pedestrians had no choice but to walk on the road instead, dodging vehicles going at 50 kmph speeds. Commuters going to Akurdi Railway Station had a really tough time!

TJ: So, what are you suggesting?

RN: Before the intervention, haphazard parking, unorganised vending, and pedestrians walking on the carriageway occupied a significant portion of the street edge, reducing the effective carriageway for moving traffic by 43%.

But after the space re-organisation under Harit Setu, around 13% of the carriageway was reclaimed for moving traffic. By fixing the footpath and creating dedicated cycle tracks, pedestrians and cyclists got their dedicated space, and vehicles got theirs. Pedestrians, in particular, got safe, continuous walking spaces with streetlights, and seating areas. The city officials also noted that the usable carriageway has also increased on some streets.

TJ: I guess that’s a nuance that gets lost in public discussions.

RN: The reality is that the project improved the overall efficiency of the street by designating street space for every street user group, making the streets safer and more accessible for everyone

TJ: Also, when upto 50% of Pimpri Chinchwad’s residents still depend on walking and cycling, it makes complete sense to me that the project prioritises pedestrians over vehicles. In fact, I heard that the project is designed around the idea that once a neighbourhood has a walkable, easy-to-use, and shaded network of footpaths, people will not need to use personal vehicles anymore for short local trips within the neighbourhood. Instead, they can just walk down to their local barber, grocery store, or park!

RN: That is correct! Which also brings us to the next problem at hand.

Claim 2. “Parking has reduced”

TJ: I heard this is the issue that is raised the most. And I can relate to their pain, because how can a home built in the 80s suddenly be expected to have its own parking lot? So where are all these vehicles supposed to go?

RN: Like I said before, these private residential vehicles had encroached a lot of space on the streets earlier, forcing people to walk on the road.

Harit Setu isn’t removing parking entirely; rather, it manages it more efficiently. Haphazard, perpendicular, and double parking becomes organised, parallel parking. This way, road space is better utilised, and the safety of the street improves drastically. And wherever possible, the city is also looking at building parking areas off the street. So, the conversation is less about losing parking and more about managing it efficiently.

TJ: I’ve also heard about these bulb-outs along the footpath edges. Some residents feel they’re just taking away parking spaces.

RN: Oh yes, the bulbouts – those 2-metre-wide green buffers you see along the footpath in the multi-utility zone. At first glance, they might look like one lost parking spot, but they are designed to improve the overall street functioning. These buffers accommodate essential street furniture like signage, streetlights, utility boxes, and trees without obstructing pedestrian movement. More importantly, they also provide the necessary clearance near property entrances, making it easier for vehicles to turn in and out safely without hitting parked vehicles. At the same time, they prevent parked vehicles from spilling onto the carriageway, helping traffic move smoothly.

*The green buffers along Harit Setu corridors, known colloquially* *as ‘kaan’ as they resemble the human ear in geometry*.

TJ: There’s also a larger question here about how our public space should be utilised. And I recall this line from one of our older ITDP publications: “Parking is a commodity, not a right.”

RN: That statement is a great reminder that parking comes at a cost! Every parking space occupies valuable public land, so it must be managed carefully. The problem here is that only 15% of the city’s households own personal vehicles, yet a significant share of street space is being occupied by this vehicle-owning minority.

To address the growing demand for on street parking, Pimpri Chinchwad Municipal Corporation (PCMC) is in the process of adopting a new, comprehensive Parking Policy which will help ensure that parking is managed better within the city. The policy focuses on managing parking in the city more efficiently by organising on-street parking, creating off-street alternatives where feasible, and ensuring that our limited road space is shared more fairly between all user groups.

TJ: Parking management is a difficult but necessary conversation that many Indian cities are now having to confront.

Speaking of difficult conversations, another point of contention about Harit Setu was its Rs 200-crore budget. People have been asking why so much money was spent on what they perceive as a mere beautification project.

RN: I understand the public sentiment that a cost as high as ₹200 crores seems unjustifiable at first, so let me break it down.

Claim 3. “The project is an expensive beautification exercise”

RN: While the most visible changes on the street are its street furniture, and paving, there is more to the picture than just beautification.

TJ: Yes, like the creation of:

Accessible footpaths,
Reorganisation and addition of new underground utilities including water supply, sewerage, stormwater drainage, gas, electrical, telecom, optical fibre, street lighting, irrigation and CCTV infrastructure,
Use of high-quality and long-lasting materials such as precast kerb blocks,
Installation of pedestrian lights to make streets safe and functional for children and elderly alike.

As a brownfield project, utilities are a major component, accounting for nearly 28% of the total project cost. I heard that existing utility networks are being reorganised, relocated, and upgraded as part of the street redevelopment, with provisions made to meet the city’s projected requirements for the next 20 years. So, the budget clearly goes towards more than aesthetics!

RN: Exactly. Creating a high-standard, pedestrian-friendly street in India would cost roughly ₹10 crore per kilometre. This is proven by street design projects across the country, such as Linear Garden Street, Pimpri Chinchwad (₹29 crores), Smart Janpath Street, Bhubaneswar (₹80 crores), Wardha Road, Nagpur (₹57 crores), and Ernakulam Smart Streets, Kochi (₹52 crores).

So, when you multiply that 10-crore figure by the 21 kilometres being developed under Harit Setu’s pilot in Pradhikaran, the ₹200 crore budget starts to make a lot of sense.

When cities prioritise vehicle-centric projects, which they often do, more traffic gets created, and along with it, an endless demand for more flyovers and wider roads. But well-designed footpaths are great investments that actually future-proof our cities by reducing congestion.

TJ: Well then, I think we have our verdict! Harit Setu is a clear investment in a safer and more resilient city, rather than just a beautification project. And evidently, this project reflects the larger vision that PCMC is building towards. Its work on Harit Setu has won the Bloomberg initiative for cycling infrastructure global challenge in 2023, and the Urban Mobility India award for City with the Most Innovative Financing Mechanism in 2025. I hope this project is explained to citizens as carefully as it has been designed.

*Pimpri-Chinchwad Municipal Corporation wins the Urban Mobility India award for City with the Most Innovative Financing Mechanism at UMI, 2025.*

RN: I agree, and that’s something PCMC has been working on. They have responded to these concerns by conducting 30+ consultations with different user groups on the significance and vision of this project. Citizen groups, stakeholders, elected representatives, Resident Welfare Associations (RWAs), political leaders, and the media have been engaged.

TJ: That’s nice to know. Perhaps the silver lining here is that Harit Setu has created a learning opportunity for not just PCMC, but also other Indian cities trying to follow suit. Which brings me back to my other question…

What can Indian cities learn from Harit Setu?

RN: The most important step would be to engage citizens and stakeholders early and throughout the process. Without clear communication on urban projects, misinformation spreads quickly. This can be done through citizen forums, one-on-one meetings, workshops, media outreach, awareness drives to curb encroachment on footpaths, and hosting public events such as Vehicle-Free Days. Complementary measures, such as behaviour change campaigns to nudge good parking behaviours, can shift public perception towards street space, and encourage people to use streets equitably and efficiently.

TJ: There’s a clear lesson here for us all – the success of a street transformation project is also based on how well the project is understood and accepted by citizens, rather than just the kilometres completed or the crores spent.

RN: Yes! And successful urban transformations happen, not when cities build for people, but when they build with people.

Authored by Tejesvini Saranga Ravi, with technical inputs from Rutuja Nivate
Project team: Pranjal Kulkarni
Edited by: Donita Jose

Frequently Asked Questions

What is the Harit Setu project in Pimpri –Chinchwad? Harit Setu is Pimpri Chinchwad’s neighbourhood level NMT street transformation project, based on the 15 minute city concept. Unlike conventional street projects, it focuses on creating a connected citywide network of streets with dedicated spaces for different users, encouraging walking and cycling while reducing dependence on motorised transport, one neighbourhood at a time.
How does the Harit Setu project improve walking, cycling, and street safety in Pimpri –Chinchwad? Harit Setu improves walking, cycling, and street safety by providing safer, continuous, and accessible, spaces for pedestrians and other street users. Before the intervention, pedestrians often had to walk on the carriageway because of discontinuous footpaths, parked cars, and vendors. But under Harit Setu, street space is reorganized to give each street user their own designated space. It also encourages people to walk and cycle more as it focusses on not one or two streets, but a network of interconnected streets so people can walk and cycle, freely to their local destinations.
How much does the Harit Setu project cost, and what is the money used for? The Harit Setu project is funded through a ₹200 crore municipal green bond. The budget covers accessible footpaths, reorganising of underground street utilities, improved streetlights, street furniture, paving, and other infrastructure required to create safer streets for citizens of Pimpri –Chinchwad.