DTC to BEST—public transport a financial burden on states. New Modi govt must bring reforms

The Delhi Transport Corporation suffered a loss of Rs 2,666 crore in 2023-2024. It is a similar story across the country.

Commuters boarding a DTC bus in Delhi | ANI file photo

Now that the dust has settled on the long-drawn-out elections and the members of the 18th Lok Sabha are on the verge of being sworn in, what should the priorities of the next government and PM Narendra Modi be regarding energy and mobility policies?

Transportation and logistics are the lifeblood that keeps the economy of a nation humming, whether it is personal transport moving you between your workplace and home, driving consumption directly through vehicle purchases, or taking you to places where you spend money. Public transportation, such as buses, auto-rickshaws and taxis also play a crucial role in this ecosystem.

The past few years have seen a dramatic change in the energy sources powering these vehicles. The rise of battery-electric vehicles, particularly two-wheelers and three-wheelers, has been significant. Hundreds of Indian start-ups have entered this space. I have written about some of them, such as Ather Energy, Exponent, OSM, in earlier columns. Additionally, workshops in many small towns are creating a new cottage industry by combining steel tubes, sheets, motors and batteries to produce the ubiquitous e-rickshaws.

Plight of public transport

Earlier this year, the government announced an important agreement with Qatar for increased supplies of Liquified Natural Gas (LNG), which is commercially sold as Compressed Natural Gas (CNG). There is also talk of a potential GST rebate on Hybrid passenger vehicles, which could drastically reduce India’s fuel bill and emissions. Meanwhile, many in the (previous) government supported increasing ethanol blending in petroleum by introducing E20 petrol, a plan I have argued makes no sense when placed against India’s food security concerns.

There needs to be a much deeper and sustained focus on public transportation across the country, particularly buses. This includes intracity, regional and long-distance buses. The main issue is that most state road transport undertakings (SRTUs) are deeply indebted and unable to meet the demand. In a paper I co-authored with Promit Mookerjee at the Observer Research Foundation (ORF), we pointed out several of these issues. Notably, with an estimated 1.3 buses per 1,000 people, India has the lowest per capita bus ratio of any large emerging economy—less than a third of Brazil’s and less than a quarter of South Africa’s.

In the report, we estimated that India would need 6,46,000 public sector buses by 2030-2031 in large metropolitan areas to maintain benchmark service levels, compared to the approximately 1,64,000 buses available today. Ideally, we should have 6, 09,000 buses today.

The sheer shortage of buses likely shares a significant portion of the blame for vehicular congestion in cities, while two-wheeler manufacturers laugh all the way to the bank. I might be a car fanatic, but it is clear that cities globally are not designed for heavy private vehicle usage. Some may blame subsidies for women and students for the heavy losses of SRTUs. For example, the Delhi Transport Corporation suffered a loss of Rs 2,666 crore in 2023-2024, according to the economic survey presented in the Delhi Assembly on 1 March this year. In July 2022, a report by the Comptroller and Auditor General of India (CAG) said that the principal and interest owed, that is total debt owed by the DTC, exceeded Rs 37,500 crore. The DTC is to the Delhi government what Air India was to the central government.

Believe me, the DTC is not alone. It is a similar story across the country, with few exceptions. Poorly managed SRTUs are possibly the single largest financial burden that states are carrying today, higher than even the power sector in some states. The scale of these losses makes it impossible to invest in necessary improvements for bus services. No matter where I travel in India, state roadways buses are generally poorly maintained and far too few in number.

My friend Kunal Khattar, a venture capital investor, once joked, “What is the point of free bus rides when the buses themselves come after 40 minutes instead of 10 minutes?” And then the bus breaks down. If your job is worth it, you go buy a two-wheeler, even a used one, for the commute.” Otherwise, as often seen in many cities, you end up crammed with ten people in a Maruti Omni.

This is not a problem the central government can fix alone; it will need the support of the states, many of which are being crushed under the weight of maintenance, salaries, and pensions. Some SRTUs, such as the DTC in Delhi and BEST in Mumbai have moved to a Public-Private Partnership model, where the private sector owns the capital assets and employs the staff running newer, mainly electric buses. However, while this model might work in cities where such operations can be profitable, public transportation is for a common ‘public’ good. As an employer, if my staff can make it to work on time and safely, I have no issue with my tax money being spent on buses.

Yes, the metro trains help, particularly on arterial routes where one needs to move millions, as Delhi-NCR has successfully shown. But you cannot afford to build the metro everywhere. For last-mile and remote connectivity, and for getting people from distant locations, buses are the solution we need as a country. I hope the new government pays attention to this issue post-haste. This is not a technological or a manufacturing problem (we have enough manufacturers who can ramp up production); this is a financial problem. Without viable public transport, growth will always be constrained.

@kushanmitra is an automotive journalist based in New Delhi. Views are personal.

(Edited by Ratan Priya)