Niti Aayog’s Rs 11,000Cr plan for buying buses

This article was published on : November 7, 2019

Niti Aayog is firming up a plan to help state governments and local bodies all over the country to buy buses worth Rs 11,000 Cr in a bid to improve public transport and revive demand for commercial vehicles. In the wake of this development, Niti Aayog has prepared a plan for the introduction of about 25,000 buses for urban users. These buses would be run on diesel.

These buses will be largely internal combustion engine-based ones, helping the industry shed its inventory, separate from the plan already in place to encourage a switchover to electric buses. A similar plan was implemented by the previous United Progressive Alliance government to help states purchase buses under the Jawahar Lal Nehru National Urban Renewable Mission after the 2008 financial crisis to boost the economy.

The move to purchase buses is also expected to boost the public transport system and urban demand for commercial vehicles. The cost of the scheme is estimated at Rs 10,648Cr, with the Central government’s share at Rs 5,241Cr. According to the draft guidelines formulated by Niti Aayog in October, the exercise will be taken up on an operating expenditure model, without any upfront cost to the state and Central governments.

Routes will be awarded through competitive bidding and a draft model concession agreement – valid for six years – will be available for states to prepare specific agreements. States will be required to identify demand-supply gaps on existing bus routes and make changes to ensure that private players availing of this scheme can ply on these routes. States shall endeavor to ensure that at least 50% of the buses under this scheme will ply on new identified last-mile routes on which state transport utility buses do not currently operate.

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