India faces 70% urban bus deficit, finds new study

India is woefully short of urban bus transport systems, with more than 400 cities lacking any buses. Faced with an overall deficit of more than 70 per cent, nearly Rs 14.20 lakh crores (165 billion dollars) are needed to acquire 6.71 lakh buses by 2047.

The current fleet strength is just 65,000. The seriousness of the situation can be gauged by the projections that urban population is projected to surge from 490 million in FY 2026 to 763 million by FY 2047, adding 270 million city dwellers, according to a new study titled The Economics of Bus Transformations: A Roadmap for Viksit Bharat 2047 conducted jointly by Centre for Science and Environment (CSE) and CITIES Forum, a global technical firm.

“Of the 14.5 lakh registered buses nationwide and 2.9 lakh State Transport Undertaking (STU) stage-carriage buses, only about 65,000 operate as organised urban city buses. This provides just 13.3 to 13.8 buses per lakh urban population — a 70 per cent shortfall against the government benchmark of 44 per lakh. Consequently, over 400 cities with populations between 100,000 and 1,000,000 completely lack an organised bus transit system,” the study finds.

People rely entirely on informal minibus, auto-rickshaw and shared two-wheeler services in such cities.

The study pointed out that Madhya Pradesh, West Bengal, Karnataka, Maharashtra and Uttar Pradesh hold the largest absolute fleets, together accounting for more than half the national active fleet.

In contrast, India’s cumulative national stage-carriage fleet reached 1,555,691 buses by FY2025-26 (with an active operational fleet of 10,82,769 vehicles), but the vast majority serve long-distance intercity and semi-urban routes.

The study said severe geographical disparities exist, as five states — Madhya Pradesh, West Bengal, Uttar Pradesh, Maharashtra and Karnataka — concentrate 55 per cent of the active national fleet. Compounding the shortage, 40,000 urban buses in service are overaged (past their 15-year statutory life), burning 20-30 per cent more fuel and incurring maintenance costs of Rs 15 to Rs 20 per kilometer. Nationwide, an unprecedented 5.8 lakh buses across all categories will reach end-of-life between 2026 and 2030. Deep financial distress persists within STUs, where accumulated losses frequently surpass annual operating revenues due to inefficient cost-recovery structures.

“India must scale its average urban bus procurement rate 17-fold, rising sharply from 2,500 buses annually to an average of 41,500 per year across three strategic waves including the Catch-Up phase (FY2027-31) requiring 44,000 to 50,000 buses annually to clear backlogs; the Stabilisation phase (FY2032-41) stabilising at 9,000 to 36,000 buses annually to absorb population growth; and the Replacement phase (FY2042-46) peaking at 71,000 to 78,000 buses annually as the initial catch-up fleet hits its 15-year statutory retirement limit,” it said.

Reaching a 100 per cent EV share in new procurements by FY2039-40 culminates in 6.04 lakh electric urban buses in service by 2047. Powering this zero-emission fleet requires 121 GWh of active battery capacity and an annual electricity demand of ~37,000 MU — a fully manageable 1.8 per cent of India’s total 2024 power generation.

“The cost of transition is projected for three growth scenarios. The conservative scenario reaches 44 buses per lakh population by 2047, maintaining a 3.36-lakh bus fleet via 4.2 lakh procurements at a CapEx of Rs 6.55 lakh crore. The accelerated scenario meets MoHUA benchmarks by 2030 and lifts provision to 60 buses per lakh by 2040, operating 4.58 lakh buses via 6.8 lakh procurements at Rs 10.55 lakh crore. The recommended target scenario matches global standards of 88 buses per lakh by 2047, expanding the operational fleet to 6.71 lakh buses (90 per cent electric), and 9.1 lakh procurements, requiring a total CapEx of Rs 14.20 lakh crore,” it said.

Prime Minister Narendra Modi’s flagship scheme PM e-Bus Sewa (2023-27) has sanctioned 10,000 e-buses with a dedicated budget of Rs 20,000 crore specifically targeting deployment in small and medium-sized cities. In another scheme called PM e-Drive, 14,028 e-buses with a budget of Rs 4,391 crore focused on large metropolitan cities has been sanctioned. According to the study, FAME-I added about 425 buses through pilot deployments; FAME-II added about 5,135 deployed of the roughly 6,862 sanctioned to February 2025; and PM e-Bus Sewa had delivered about 5,000 of its 10,000-bus target by early 2026.