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Parking Reimagined: Chennai’s Parking Policy is Paving the Way for Better Streets

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Commuting in Chennai’s streets often feels like a game of Would You Rather?—except that the choices aren’t fun. 

Would you rather drive in circles for 20 minutes looking for a parking spot, only to settle for an informal parking space with an arbitrary fee? Or walk on the roadside, dodging parked bikes and cars, weaving through traffic, and hoping for a safe path? 

In Chennai, these aren’t just hypothetical scenarios, with a population of 15.37 million and 9.2 million registered vehicles, the Chennai Metropolitan Area (CMA) faces a severe parking crunch as there’s nearly two vehicles for every three people in the city. A driver struggling to park in a narrow lane, while a pedestrian—with an elderly companion or child—undertaking challenging obstacles on a short 500-meter walk, dodging haphazard parking one side and speeding vehicles on another- are common scenes we all encounter. 

Sadly, neither choice makes the city easy to move around and aren’t working for anyone, just like how a would-you-rather game has no correct response. 

But can the new parking policy and on-ground parking management be the answer, that can lead to a win-win situation for everyone using the street?  
 
That’s exactly what Chennai has set course for. This year, the city took a historic step toward better parking management by launching a progressive Parking Policy for the entire 5,904 sq. km of the Chennai Metropolitan Area, which includes four corporations – Chennai, Tambaram, Avadi, Kancheepuram, 12 municipalities, 13 town panchayats, 22 panchayat unions and one special grade town panchayat. The policy was developed by the Chennai Unified Metropolitan Transport Authority (CUMTA), which will not only plan, design and strategise, but also oversee its implementation and monitoring. 

Since April 2022, ITDP India has been a key technical partner, supporting CUMTA in shaping this landmark policy.  

Stakeholder Meeting with GCC and GCTP in September 2022

This policy not only addresses the city’s growing parking challenges through area-level parking plans, Travel Demand Management measures, but also brought together key stakeholders—including Greater Chennai Corporation (GCC), Avadi and Tambaram Corporations, Traffic Police, Highways, and Chennai Metropolitan Development Authority (CMDA)—through extensive consultations. 

CUMTA’s Parking Policy: Transforming Urban Mobility  

CUMTA’s newly adopted Parking Policy 2025 is more than just a set of regulations—it’s a transformative approach to managing limited parking space efficiently, reducing congestion, and improving mobility. Here’s a look at its key highlights of the policy: 

1. Managing parking at the area level and creating neighbourhood wide solutions, to prevent spillovers  

What does the policy say?
With the new policy, Chennai is shifting from scattered parking management in isolated streets, to a structured, Area-Level Parking (ALP) Management plan with demand-based pricing, clear regulations, and smart enforcement. The plan allocates parking spots in every street, based on the demand, and uses both ground teams and technology to manage parking efficiently across the neighbourhood. 

Why is it important? 
Managing parking in a few streets isn’t effective and can make the problem worse by causing spillover and more traffic in the adjoining streets. But when we look at a whole area and its network of streets together, we can address the neighbourhood’s need for parking more effectively. This also ensures that street space is used efficiently and is accessible to all street users. By using a demand-based pricing system, we can discourage unnecessary car/bike use and encourage people to choose more sustainable options, like public transport or cycling. 

Site Visit in Anna Nagar Chennai towards preparation of ALP (CUMTA x ITDP India x Street Matrix)

2. Prioritising Pedestrians, Cyclists, and Public Transport users, Before Parking

What the policy says? 
The policy ensures that the city agencies build safe, continuous footpaths and well-integrated NMT infrastructure. The policy gives precedence to footpath allocation over parking.  The policy ensures that parking space is allocated to a street, only after sufficient footpaths and carriageway space is available.    

Why is it important?
More than 60% of trips starts and ends on foot. Poor footpaths/no footpaths push pedestrians onto carriageways, increasing their exposure to moving vehicles and reducing safety. Presence of NMT infrastructure reduces vehicle dependence, easing parking demand, and optimising street space, ensuring safer, more inclusive streets. This way parking plans will also nudge the city agencies to ensure walkable footpath are available, leading to wider footpath coverage. 

Pedestrian Plaza at T.Nagar with On-Street Parking Management.

3. Demand-Based Dynamic Pricing and Smart Enforcement to Shape People’s Parking Behaviour 

What does the policy say?
Parking rates under the new policy will be dynamic based on the area. It will vary, by vehicle size, location of the parking spot, time of day, and demand. On-street parking will be priced higher than off-street options (government or private MLCPs, parking lots, etc.). This will nudge those wanting to park their vehicles for long term (more than 2 hours) to look for off-street options and allowing the on-street parking lots to be open for short terms users. Prepaid parking will replace postpaid models to encourage planned usage.  
As per the parking policy, enforcement measures will be taken up for the following kind of violations: double parking, parking in no-parking zone, parking on footpath, non-payment of parking fees etc. These violations will be discouraged with the use of technological interventions through sensors, cameras, etc. and on-ground parking teams. 

Why is it important?  
Pricing strategies help manage demand for parking, reduce congestion, and discourage personal vehicle user. Only those willing to pay end up coming in cars and bikes, while the rest may turn to other sustainable options.  
For example, T. Nagar, a bustling commercial area, has a higher parking charge of Rs. 60 per hour for cars, while in other areas, the charge is Rs. 20 per hour.  
In contrast, the proposed parking charges for Anna Nagar are Rs. 40 per hour. These rates have been set based on factors such as, how majority of the people commute while visiting the area, availability of public transport, land use, and considerations for traffic management. 
Enforcement strategies are an important tool for behaviour change. The focus of the policy is to not penalise the violator but discourage the violations. By adding penalties and punitive actions to the violations, people’s parking habits can be modified for the better. 

Comprehensive on-street and off-street parking fee strategy at Pedestrian Plaza at T.Nagar

4. Chennai to take a centralised approach to parking management with a Parking Management Unit (PMU) 

What does the policy say?  
The policy establishes the need for a single authority to manage parking holistically. The Parking Management Unit (PMU) will be this single authority and will function under CUMTA. It will be responsible for planning, pricing, enforcement, and implementation across agencies. 

Why is it important?  
A single authority streamlines decision-making, prevents fragmented implementation across agencies, and ensures consistency in pricing, enforcement, and monitoring. In many other cities, this was a critical reason why parking policies failed to bring the results as expected, as the implementation and enforcement were split among multiple agencies. 

5. Policy allows for Legal & Policy Amendments to other key legislations 

What does the policy say?  
For on-street parking spaces: As per the policy, Traffic Police, Urban Local Body, and Road Owning Agency can pass an official order to delegate parking responsibility and enforcement to CUMTA’s PMU. This will ensure seamless management across agencies.  
For off-street parking spaces: The policy recommends amendments to TNCDBR (Development Control Regulations of TN). This will help redefine how much off-street parking must be made provided in any property development. For example, in areas with high coverage of public transport, the overall number of permissible parking lots is reduced. This follows the concept of parking maximums, to ensure people use the public transport that is easily available and are not dependent on personal vehicles. 

Meeting at CUMTA with CEPT-CRDF (TNCDBR Consultant) in August 2023

Why is it important?
Contextualising the existing legal framework is critical for effective enforcement, regulatory clarity, and integrating parking seamlessly into urban planning frameworks.  As per the current legal framework, the parking management roles are fragmented with Traffic Police and Urban Local Bodies on planning, pricing, implementation and enforcement. The new policy allows CUMTA to take up the responsibility from different agencies and be the sole management unit- through the PMU. 

6. Parking Fee collected from the area to be re-invested back in the area 

What does the policy say?
Surplus parking revenue will be ring-fenced for local improvements, including better footpaths, cycling infrastructure, and public spaces. This approach ensures that the benefits of effective parking management are directly felt by the community, enhancing the quality of life and encouraging more sustainable modes of transport. 

Why is it important?
Unlike traditional models where parking fees is looked at as a general pool of revenue, not linked to any one location, Chennai’s Parking Policy ensures that the revenue collected is re-directed to prioritise improvements in that specific location. 
Currently, the annual parking revenue in Anna Nagar is approximately Rs. 35 lakhs. However, with effective parking management, it is estimated that this could increase to Rs. 3.3 crore per year. This is because, the current practice in Anna Nagar involves pricing per parking slot, rather than, an hourly basis, and not all streets have designated parking slots, resulting in an isolated approach. In contrast, the proposed plan adopts a cluster approach with hourly pricing, ensuring a more organised and efficient system. This revenue will be reinvested into improving Anna Nagar’s mobility, streets, green spaces, etc. 

Future-Proofing Chennai’s Streets

The policy also allows for some future-proof strategies like Urban Freight Management, EV charging integration, Travel Demand Management.

  1.   Urban Freight Management: This is a structured city-level and area-level approach to regulate the  movement of goods. This ensures dedicated loading/unloading zones are allocated on the streets  to reduce congestion and improve last-mile logistics. 
  2.  EV Charging Integration: To ensure that streets can accommodate the growing number of electric vehicles (EVs), the parking policy emphasises the need to integrate both on-street and off-street e-charging infrastructure. By planning for EV charging within parking spaces, the policy supports the shift to cleaner mobility. 
  3. Travel Demand Management (TDM): The policy also allows to create customised strategies for schools, workplaces, and commercial hubs by promoting sustainable commuting options, staggered work hours, and shared mobility to reduce peak-hour congestion.  

How will CUMTA ensure this policy is implemented well and monitored? 

Currently CUMTA has kickstarted the implementation of the policy through Area Level Plan in Anna Nagar. They will roll it out by hiring parking service providers who will manage collection of fees, enforcement etc. This will be a pilot intervention, learnings from which will inform future implementation. Since this is a technology driven parking management plan, CUMTA has also initiated the development of a parking app and a centralised command center for monitoring. The implementation of this pilot will be monitored through 14 robust Key Performance Indicators (KPIs).  

Conclusion 

Chennai’s streets, once vibrant corridors of life, now prioritise metal over people. And for years, moving through the city has felt like a never-ending game of Would You Rather?—drive in circles hunting for parking or weave through a maze of parked vehicles on foot. 

The Parking Policy changes that. It doesn’t force citizens to choose between driving and walking or taking public transport. Instead, it ensures that everyone gets their fair share of space on the road. 

This policy isn’t just a document—it’s the end of a bad game and the beginning of a better city. And that’s a milestone worth celebrating. 

By Sangami Nagarajan, Associate Urban Planning,
With Inputs from Venugopal AV, Programme Manager

Edited by Donita Jose

ZEV Mandates: The Missing Supply-Side Policy Push for India’s EV Revolution

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Read time- 10 minutes

As cleaning up India’s air becomes more crucial than ever, is the lack of strong policies to electrify buses a critical piece missing in the puzzle? Being the world’s second-largest automotive market in both vehicle production and consumption (OICA, 2024), India’s transition to electric mobility is pivotal for achieving its climate targets. Most critically, buses will play a crucial role in reducing carbon emissions by 1 billion tonnes by 2030 and reaching net zero by 2070. 

But why are buses so critical to India’s story of reducing footprint? Road transport contributes over 10% of India’s total CO₂ emissions, with heavy-duty vehicles (HDVs) like buses and trucks accounting for nearly 40% of transport emissions despite representing only 2% of the vehicle fleet (ICCT, 2021). This disproportionate footprint highlights the urgent need to prioritise the decarbonisation of buses and trucks. Despite this, the current pace of electrification remains slow. 
 
In FY2024-25, only 3% of total bus sales in India were electric, with just 3,400 e-buses sold compared to over 1 lakh Internal Combustion Engine (ICE) buses. This is starkly insufficient against India’s commitment under the EV30@30 campaign, which targets 40% of all new bus sales to be electric by 2030. This is barely five years from now. 

Projections by ITDP India under the business-as-usual scenario estimated that India will only achieve 11% e-bus sales by 2030, far below the target of 40% under the EV30@30 initiative for buses. At this rate, only around 10,000 e-buses would be produced annually by 2030, whereas achieving the 40% target necessitates scaling production to 40,000 units per year—a four fold increase. Compounding this challenge is the limited manufacturing capacity of Indian e-Bus Original Equipment Manufacturers (OEMs), which collectively produce just 3,000 units per year as of 2025. Bridging this gap requires a paradigm shift—one that moves beyond demand-side incentives to a comprehensive policy framework anchored in Zero Emission Vehicle (ZEV) mandates. 

What are ZEV Mandates?

A Zero Emission Vehicle (ZEV) mandate is a regulatory policy that requires automakers to sell a certain percentage of zero-emission vehicles — such as battery electric vehicles (BEVs), hydrogen fuel cell vehicles (FCEVs), or plug-in hybrid electric vehicles (PHEVs) — each year relative to their total sales. 

In many regions, ZEV mandates are also extended to fleet operators, requiring them to procure a defined percentage of zero-emission vehicles within their fleet procurement cycles. 

Manufacturers that fail to meet these quotas must purchase credits from compliant companies or face penalties. ZEV mandates are designed to accelerate the transition away from internal combustion engine (ICE) vehicles and help countries meet their climate and clean air goals. 

How ZEV Mandates Helped EU and China

India’s EV penetration rate currently stands at 12.9%, driven largely by three-wheelers leading at 53.3% of sales, the adoption of larger vehicles such as buses and heavy-duty trucks has been considerably slower. 
 
Currently, electric buses account for only 3% of total new bus sales in India, despite the country being the world’s second-largest bus market with annual sales averaging over 1 lakh units. In comparison, China introduced its New Energy Vehicle (NEV) mandate in 2017. Within just six years of cumulative efforts, the mandate has led China to achieve a stock of over 6,70,000 e-buses on its roads as of 2024. The share of electric buses in new sales in China became over 20% by 2023 (Source: IEA Global EV Outlook 2023). Meanwhile, the European Union (EU) has also progressed steadily, with 8% of electric buses in new sales in 2023, amounting to around 12,000 e-buses. In contrast, India lags significantly behind these global leaders, with only 10,500 e-buses on the road as of 2025, despite ambitious national targets. This highlights the urgent need for India to shift from a demand-side incentive approach to a supply-side mandate framework like the ZEV and Zero-Emission Buses (ZEB) mandates adopted internationally. 

Globally, ZEV mandates have proven effective in accelerating EV adoption in: 

  • China: The New Energy Vehicle (NEV) mandate introduced in 2017 resulted in a 90% compound annual growth rate (CAGR) for EV sales, making China the largest EV market with over 670,000 electric buses. 
  • EU: The EU’s fleet CO₂ regulations have spurred a significant shift toward zero-emission buses, with 36% of new city bus sales being electric in 2023. 
  • California: The state’s ZEV mandate has led to 7.8% of new vehicle sales being zero-emission, supported by credit trading mechanisms to ensure compliance. 


Why E-Bus Adoption is Slow in India Despite Several Incentives 

Despite numerous government incentives and policies, several structural and operational challenges impede the widespread deployment of e-buses in the country.  

Over the past eight years, India’s push toward electric mobility has relied heavily on demand-side incentives through schemes like FAME I, FAME II, the PM E-Bus Sewa, and the proposed PM E-Drive scheme. These initiatives have successfully spurred EV adoption in two- and three-wheelers. However, in the critical heavy-duty segment — specifically buses — the progress is fragmented, tender-driven, and lacks long-term certainty. 

Below are the key factors hindering the growth of the e-bus sector: 

  1. State Road Transport Undertaking (STU) Centric Policies and Incentives: The existing policy framework for e-buses heavily prioritises STUs, which account for only 8% of the total bus fleet in India. Meanwhile, the private sector, operating a staggering 92% of the buses, remains largely neglected.  
  2. The Private Sector Missed the Electrification Bus: The private sector faces multiple challenges that hinder its participation in the e-bus transition. High upfront cost of e-buses, combined with inadequate financial incentives, makes e-buses prohibitively expensive for private operators who are managing nearly 21.50 lakh buses in India. (Vahan Dashboard, MoRTH Road Transport Book). Furthermore, the lack of robust charging infrastructure exacerbates operational inefficiencies and range anxiety, i.e how far the vehicle will go in a single charge. Despite accounting for 86% of total bus purchases annually, private operators are largely excluded from policies and incentives, leaving them reluctant to make large-scale investments in e-bus adoption.  
  3. Delay in E-Bus Delivery: OEMs struggle to scale e-bus production due to fragmented and uncertain demand from STUs, which dominate the e-bus market with large but ad hoc orders. In the ICE bus market, OEMs have a sustained demand from private bus operators, which has enabled them to scale their production. For example, 95,000 new diesel and CNG buses were added to the roads last year alone. Due to this, unlike the ICE bus market, where large orders of 1,000 buses are typically delivered within six months and annual production reaches 10,000–15,000 units per manufacturer, e-bus orders of the same scale often take over a year or even two years to fulfill, with production capacities limited to just 500–600 units annually. This monopsony market, where there is only one buyer for a product or service, but many sellers, is heavily reliant on government procurement, restricts Original Equipment Manufacturers (OEMs) from diversifying their customer base or achieving economies of scale, thereby contributing to delivery delays.  
  4. Overburden of responsibilities on OEMs: Most e-buses in India procured by STUs are being brought in under the Gross Cost Contract (GCC) model. In this model, OEMs not only manufacture but also act as operators for e-buses, as traditional private bus operators lack the capacity to procure and supply e-buses on GCC to STUs due to financial constraints. While this model has been instrumental in the past, launching the e-bus market for STUs, it is not sustainable in the long term for OEMs. The dual role burdens OEMs with operational responsibilities that require significant upfront capital, and operational expertise, including staff management, which many manufacturers lack. As a result, scaling production? Sales? Operations? under the GCC model remains a significant challenge for OEMs. 
  5. Targets Without Mandates: Although national and state-level policies have established electrification targets for STUs, these targets are not supported by robust mandates or a clear roadmap for implementation. The lack of enforcement mechanisms leads to inconsistent adoption and undermines the efficacy of these policies. Without mandatory guidelines for both public and private operators, the transition to e-buses remains fragmented and slow. 
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ZEV Mandates: The Missing Supply-Side Policy Push for India’s EV Revolution

Need for Supply-Side Mandates in India

To meet its EV30@30 and net-zero targets, India must explore alternative measures beyond demand-side incentives to boost manufacturing. While initiatives like FAME-I, FAME-II, State schemes, and PM E-Bus Sewa have spurred initial growth, they are insufficient alone. Without a shift toward supply-side mandates, such as Zero Emission Vehicle (ZEV) mandates, the country risks falling short of its goals.  These mandates would compel manufacturers to scale up production significantly, addressing the current gap in manufacturing capacity and ensuring a steady supply of electric buses to meet the ambitious targets. They can ensure that clean mobility is no longer voluntary or incentive-dependent, but a legal and scalable requirement. 
According to the Economics of Energy Innovation and System Transition (EEIST) assessment, which evaluated the effectiveness of various policy instruments across four regions worldwide, mandates consistently emerged as the most effective tool for driving the transition to electric vehicles (EVs). According to the report: 

  1. Mandates ensure a shift to zero-emission technology, leaving nothing to chance. They compel manufacturers to produce a certain percentage of zero-emission vehicles, thereby guaranteeing a steady supply of EVs in the market.  
     
    This approach is crucial for India, where the current manufacturing capacity of electric buses is significantly below the required levels to meet the EV30@30 targets. Sales must increase by atleast four times. 
  2. Subsidies and taxes, when used without the support of regulations or mandates, are relatively ineffective due to limited consumer awareness and access.  
     
    While financial incentives like FAME-I, FAME-II, State schemes, and PM E-Bus Sewa have spurred initial growth, they are insufficient alone to meet India’s ambitious electrification goals. These incentives often fail to create a sustained market demand for EVs, as they do not address the supply-side constraints. 
  3. Regulations are generally more cost-effective than financial incentives for driving the transition to electric vehicles. By setting clear targets and compliance requirements, mandates provide a predictable and stable policy environment that encourages investment in EV manufacturing and infrastructure. This regulatory certainty is essential for scaling up production and achieving the necessary economies of scale. 

Supply-side mandates, such as Zero Emission Vehicle (ZEV) mandates, will be crucial in bridging the gap in manufacturing capacity and ensuring a steady supply of electric buses. These mandates will compel manufacturers to significantly scale up production, addressing the current shortfall and ensuring that India remains on track to meet its electrification goals. 

Key Takeaways: 

  • Subsidies and tax benefits provide only limited progress, as seen in the US, Europe, and India where EV deployment remains low without regulatory backing. 
  • Regulations and supply-side policies drive higher adoption, particularly in China and Europe, where emission limits and industry obligations accelerate electrification. 
  • ZEV mandates are the single most effective policy tool, ensuring that EV adoption continues consistently and at scale across all major regions. 
  • India lags significantly in EV adoption under its current policy structure, reinforcing the need for legally binding mandates to drive large-scale transformation. 

Driving Toward a Sustainable Future 

India’s journey toward zero-emission transportation represents not just an environmental imperative but a transformative opportunity for the nation’s mobility sector. By adopting comprehensive Zero Emission Vehicle (ZEV) mandates, the country can overcome long-standing challenges such as limited private sector participation, insufficient manufacturing capacity, and fragmented policy frameworks. Learning from global leaders like China, the EU, and California, India has the potential to scale up electric vehicle adoption across high-impact segments like buses and trucks. 

Supply-side ZEV mandates, combined with prioritising local manufacturing, targeting commercial fleets, and fostering market-driven compliance, will enable India to achieve its ambitious EV30@30 and net-zero targets. With the right policies and collaborative efforts, India can lead the way in creating a cleaner, greener, and more equitable future for mobility.  

Written by Aditya Rane S- Senior Associate, Transport Systems and Electric Mobility
With inputs from Vaishali Singh, Programme Manager, Transport Systems and Electric Mobility
Edited by Donita Jose, Senior Associate, Communications

Tamil Nadu Budget 2025: Public Transport Gains, but Walking and Cycling Need More Attention

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On March 14, the Tamil Nadu (TN) government announced the much-awaited budget outlay for the financial year 2025-26. At the state assembly the Honourable Finance Minister Thangam Thennarasu announced the state budget to have an outlay of Rs.57,231 crore. This is nearly 20% more than the 2024-25 budget when Rs.47,681 crore was the total capital expenditure outlay.  

We at ITDP India analysed the budget outlay across sectors to understand how much allocations was given for sustainable urban transport and urban development this year. This is a critical exercise to see whether the budgets are in line with the state’s overall commitment to Sustainable Development Goals and its other forward-looking policies like Tamil Nadu EV Policy, city level Non-Motorised Transport Policy and Comprehensive Mobility Plans  

Here are some of the key highlights of the allocations, along with our insights and recommendations: 

1. Improving Public Transport- Rs.170 crores

The 2025-26 budget provides dedicated allocation for the enhancement of public transport service, operations, and ridership. 

  1. The budget features two Multimodal Transport Terminals to integrate rail, metro and bus transport, at Guindy and Washermanpet , at a cost of Rs.100 crore, featuring “state of the art” passenger amenities. This project shows its commitment to ensuring seamless connectivity across transit modes.  
  2. There is a focus on creating clean and green buses, where the State Transport Corporations will be converting 700 diesel buses to CNG buses at Rs.70 crore and 1125 e-buses will be deployed across Chennai (950), Coimbatore (75), and Madurai (100) for public use starting in 2025-26.  
  3. The Mini-bus scheme is being expanded with revised rules and regulations in around 2,000 routes. 

Why we are glad!
With 28.2% of Chennai’s citizens relying on buses, metro, and rail— covering first- and last-mile distances on foot—the investment in two multimodal hubs is a timely and welcome move. These hubs will expand public transport coverage, improve accessibility, reduce travel distances, and times. They will also ensure seamless transfers, integrate information across modes, and provide standardised wayfinding facilities.

Tamil Nadu converting 700 diesel buses to CNG, is a good move as compared to diesel, CNG reduces particulate emissions by up to 70%, improving public health in areas where air quality often exceeds safe limits. Additionally, it aligns with the state’s climate goals, cutting greenhouse gas emissions by 20-25% per bus. This initiative lays the groundwork for scaling up cleaner public transport.

Electric buses further support sustainability efforts. The addition of 1,125 electric buses will save diesel fuel costs and cut down carbon emissions.

However, Tamil Nadu still faces a significant shortfall. Based on MoHUA’s benchmark of 60 buses per lakh population, the state’s eight major cities require 12,900 more buses. Despite this gap, Tamil Nadu is leading the way in electric bus adoption, demonstrating how strategic infrastructure planning can support sustainable transit.

The Mini-bus scheme expansion addresses last-mile connectivity issues in suburban and rural areas, where residents often depend on private vehicles or informal transport. By extending the scheme to 2,000 routes with updated regulations, Tamil Nadu aims to improve service quality and coverage. These regulatory changes are expected to resolve operational challenges, enhancing feeder bus services and creating a more efficient system.

2. Providing Assistance to Transport Undertakings – Rs9,682 crore

The Tamil Nadu State Transport corporations are allocated budget for various kinds of subsidies and funds this year. 

  1. Rs.3,600 crore for Magalir Vidiyal Payanam, for free bus rides for women. 
  2. Rs.1,782 crore for free student bus pass scheme. 
  3. Rs.1,157 crore for diesel subsidy. 
  4. Rs.2,000 crore performance-based incentive fund will also be provided to Transport Corporations in Tami Nadu. 
  5. Over and above these subsidies, Rs.646 crore has also been allocated for MTC Chennai as a viability gap fund. 

Why we are glad 
This comprehensive allocation addresses multiple challenges facing Tamil Nadu’s public transport system. The free bus passes for women have already shown remarkable success, with women ridership increasing from 40% to 61% since implementation. The economic impact is substantial, with women saving roughly Rs800 monthly through this scheme. The diesel subsidy component helps mitigate fuel price volatility, ensuring transport corporations can maintain service levels. 
Viability Gap Funding is crucial for developing new infrastructure projects that might otherwise lack financial sustainability. This holistic approach to transport financing , sets a national precedent for how states can support public transportation through multiple financial mechanisms while addressing social equity and operational sustainability. 

Pic: Students await their bus in Chennai

3.Pushing for Electrification – Rs.4 crores

The TN state budget also includes allocation to nudge the adoption of EV by the private sector. 

  1. The Tamil Nadu Platform-Based Gig Workers Welfare Board has been established to promote the welfare of workers. A new scheme has been initiated to support the livelihood of workers registered with the welfare board by providing a subsidy of Rs.20,000 each to 2,000 internet-based service workers for purchasing a new electric vehicle (e-scooter). 
  2. Roadside facilities at 10 selected locations on state highways, including power supply facilities for Electric Vehicles, food stalls, accommodation, rest rooms, first-aid and basic medical facilities, along with shopping malls have been proposed.   

Why we are glad:
Tamil Nadu government supports the growing gig economy by addressing transportation challenges for platform-based workers. High upfront costs have been a barrier to e-scooter adoption, but this subsidy shortens the payback period, making EVs more viable. Research indicates that a 1% increase in purchase subsidies can boost EV sales by 1.36%. While this allocation covers 2,000 workers, it lays the groundwork for scaling incentives, reducing the carbon footprint of last-mile deliveries and personal transport.
Additionally, new roadside facilities fill critical infrastructure gaps for long-distance travelers and commercial drivers. By integrating EV charging stations, Tamil Nadu is tackling range anxiety, a key barrier to EV adoption. This initiative aligns with the state’s EV goals, combining amenities with economic opportunities to create a sustainable highway service model. As Tamil Nadu expands its EV network, these facilities set a precedent for boosting electric mobility while enhancing highway infrastructure.

4. Allocating for Climate Resilient and Healthier Public Spaces – Rs.582 crores

The Tamil Nadu government has shown commitment to invest on climate resilient spaces by announcing multiple projects. These include: 

  1. Creation of Climate Resilient Sponge Parks in seven places in Chennai Metropolitan area with allocation of Rs.88 crore. 
  2. A Riverside Development Works project which includes creation of sewage treatment plants, footpaths, streetlights etc. has been announced for Trichy, Madurai, Erode, Coimbatore, and Tirunelveli Corporations. An allocation of Rs.400 crore has been made for the same.  
  3. Blue Flag Certification for six beaches has been announced with allocation of Rs.24 crore. 
  4. Eco Park to be created in the heart Udhagamandalam in Nilgiris district. It will cover an extent of 52 acres and will be established in the Racecourse area. Allocation of Rs.70 crore has been made for the project. 

        Why we are glad: 
        Tamil Nadu’s continued focus on flood resilience, climate adaptation, and public health is a step in the right direction! Investments like these also create opportunities to transform public spaces, boost local economies, and create safer, healthier, and more vibrant neighborhoods. When designed well, these spaces can encourage walking, cycling, and community engagement, making cities more livable and sustainable. 
        Additionally, integrating walking and cycling infrastructure, universal street design, and traffic calming measures as a standard in road improvement projects as per our earlier recommendation, will ensure equitable accessibility for such public spaces, promote modal shift to sustainable transport and help minimise carbon emissions. 

        5. Investing more in Urban Highways – Rs.4193 crore

        The TN State Budget continues to support the expansion of its highway network and industrial corridors. Notably among them are,  

        1. The Tamil Nadu State Highways Authority (TANSHA) has been allocated Rs.2,100 crore for a 14.2 km long four-lane elevated road from Thiruvanmiyur to Uthandi along the East Coast Road.  
        2. Rs.380 crore have been allocated for flyovers in Chennai under the Kalaignar Nagarpura Membattu Thittam. 
        3. Rs.1713 crore of allocation for the construction of 14 bypasses across cities in Tamil Nadu including Coimbatore and Tirunelveli. 

        What we recommend: 
        Data shows that widening of roads does not reduce traffic congestion, rather increases it. Wide roads attract more vehicles and high speeds-the biggest reason for road crash deaths in Tamil Nadu. Beyond road engineering solutions, this is an opportunity to prioritise road equity by ensuring a balanced Right of Way for all users—pedestrians, cyclists, and public transport commuters alike.  
        The funding should therefore support the implementation of traffic calming elements in these corridors with well-designed footpaths and cycle lanes, safer crossings with refuge islands and other facilities for universal access. This is necessary to ensure that the urban highways, flyovers and bypasses are safe and comfortable for everyone to use. 
        As the State continues to expand its road infrastructure, the focus should shift from merely adding more lanes for private vehicles to building an efficient and reliable public transport system. Dedicated bus lanes have been proven to significantly cut travel times by 20-30% during peak hours, ensuring that buses can move efficiently even in high-traffic corridors. This not only makes public transport more attractive, also boosts ridership and revenue. A great example is Bengaluru’s NIMBUS project, where the introduction of dedicated bus lanes led to a 64% increase in ticketing revenue—a clear indicator of how prioritising buses can transform urban mobility.  

        6. Making Investments for Road Infrastructure Upgrades – Rs.13,952 crore

        In 2025-26 budget as well, TN government continued to invest in multiple road development and road expansion projects. Notably among them were:

        1. Under the Kalaignar Nagarpura Membattu Thittam scheme a total outlay of Rs2000 crore was seen for various development work. Of this, road works worth Rs.816 crore have been allocated for infrastructure upgrades. These will be taken up across Chennai, Coimbatore and Madurai. 
        2. Road upgradation work got a focus, additionally, under the Nagarpura Salai Membattu Thittam, at a cost of Rs.550 crore.
        3. The budget also provides a substantial allocation of Rs.9,476 crore under the Comprehensive Road Infrastructure Development Programme to improve roads and bridges, state-wide.
        4. The city of Chennai is set to receive another allocation of Rs.2,910 crore towards the development of the Peripheral Ring Road Project, a stretch of 132.87km connecting Ennore Port in the north to Poonjeri in the south.
        5. The budget also provides allocations to the tune of Rs.200 crore for Urban Highways, to implement suitable improvements in high-risk and accident-prone areas, including narrow curves and road junctions.

        What we recommend: 
        Continued investment in road infrastructure upgrades is a positive step towards improving urban mobility.  
        To make our streets truly inclusive and efficient, it is essential that the government invests not just in carriageway improvements, but beyond. As mentioned above, integrating walking and cycling infrastructure and following universal design practices should be non-negotiable in all road development work initiated by the state. 
        Including features such as raised crossings, refuge islands, and designated parking can help ensure safer access for all users. We recommend that these critical design elements are integrated into all new road projects. 

        Other Highlights

         

        It is worth mentioning that there are recurring investments in key areas of urban mobility as well as creation of new projects to enhance urban sustainability and safety:. 

        1. Chennai Metro Rail Project – Phase II gets continued allocation of Rs.4,807 crore.
        2.  Singara Chennai 2.0 – Continued allocation for urban development projects for Chennai city under this scheme with an outlay of Rs.850 crore.
        3. Global City in Chennai- A new city will be developed near Chennai spread over an extent of 2,000 acres. TIDCO will soon commence the works for the first phase of the ‘Global City’ project, which will offer world-class facilities.
        4. Safety for Women- The budget has shown a continued commitment towards women safety with this year’s budget earmarking Rs.75 crore for the same in Chennai and four other cities across Tamil Nadu.

        By Varsha Vasuhe (Associate Urban Development), Sanchana Sathyanarayan (Associate Healthy Street)
        With Inputs from Sooraj EM, Deputy Manager & Venugopal AV, Programme Manager

        Edited by Donita Jose and Aangi Shah (Communications)

        Union Budget 2025: Encouraging Push for Public Transport and E-Mobility, But Is It Enough? 

        by

        The latest Union Budget 2025-26 announcement by Finance Minister Nirmala Sitharaman on February 01, 2025 has shown continued support for public transport and e-mobility. This reflects the government’s commitment to sustainability.  

        Here are the highlights in terms of allocations to promote more buses and electric mobility: 

        Key Budget Allocations

        1. PM e-Bus Sewa Scheme: This scheme received Rs 1,310 crore (up from Rs 500 crore in 2024). This scheme aims to improve urban bus transport in India by providing nearly 10,000 urban buses to cities.  
        2. PM e-Drive Scheme: This new flagship scheme received an increased allocation from Rs 1,870 crore in 2024 to Rs 4,000 crore this year. This is a two-fold increase! The scheme will support in procuring 14,000 new e-buses, 1,10,000 e-rickshaws, e-trucks, and e-ambulances.  
        3. Production Linked Incentive (PLI) for Battery Storage: Under the overall push for PLI scheme, the National Programme on Advanced Chemistry Cell (ACC) Battery Storage, received a small share with an allocation of Rs 155.76 crore. This helps reduce battery costs and promote EVs but could have been higher. 

        However, when we compare these allocations to actual needs, the gap remains significant. 

        A Huge Gap in Urban Buses

        India needs 2,00,000 urban buses, but only 35,000 are operational (inclusive of e-buses). To bridge this, the union government scheme provides just 24,000 buses (10,000 from PM e-Bus Sewa and 14,000 from PM e-Drive throughout the duration of the entire scheme over multiple years). This is far below than what is required.  

        Pic: A crowded bus in Bhubaneshwar. Owing to no major investments in public transport over the years, the passenger experience has been deteriorating

        Metro Rail Funding vs Bus Funding

        In the 2025 budget, one standout was how the metro rail funding increased significantly from Rs 24,000 crore to Rs 31,000 crore, with Rs 649 crore in grants. We at ITDP India wish a similar allocation was done for PM e-Bus Sewa to make a big impact on bus services in alignment with the actual need for buses.  

        The budget supports public transport and e-mobility, but to truly transform urban mobility, more investment and better execution of schemes are needed. Over and above this, sustainable mobility also requires investment in walking and cycling infrastructure as well and we hope this happens soon! 

        By Vaishali Singh, Programme Manager, ITDP India

        With inputs from Parin Visariya, Venugopal AV, Donita Jose