The Economics of the Daily Commute

The Economic Survey 2025-26 of India offers a positive macroeconomic outlook. With real GDP growth of 7.4 percent in FY26, the survey again emphasises that growth through infrastructure, capital spending, and agglomeration economies in urban areas will drive India's medium-term outlook. The survey also recognises that in terms of functional size, Indian cities already contribute close to 70 percent of the country's GDP and have the potential to house 600 million people by 2036.

However, from the perspective of urban mobility, the Economic Survey indicates an asymmetry. While cities are portrayed as engines of productivity and prosperity, the transport infrastructure that enables both is still analysed primarily as an asset to be developed rather than an outcome to be achieved.

An analysis of the Economic Survey 2025-26 from the urban transport planning, operations, and management angle highlights the following salient points:

• Infrastructure Gains – A Decade of Expansion: The survey notes that India currently has about 1,036 km of operational Metro Rail and Regional Rapid Transit System (RRTS) corridors in and around 24 cities. This expansion of urban transport infrastructure over the last decade is portrayed as productive infrastructure with the potential to affect labour markets and to make cities more compact and efficient. It also highlights the October 2024 PM e-Bus Sewa initiative with an estimated financial outlay of INR 3,435.33 crore, which aims to support the deployment of over 38,000 electric buses under its Payment Security Mechanism (PSM). This financial framework is a significant departure, as policymakers recognise that the problem of bus services in India is as much about fiscal vulnerability as about upgrading fleets. 

Figure 1:

Source: Economic Survey 2025-26 Highlights

The Ministry of Housing and Urban Affairs (MoHUA) standards recommend 40-60 buses per lakh of population, but numerous cities fall far short of this target. The survey neither measures city-level performance in meeting these standards nor correlates bus fleet size with service quality performance.

However, while the survey discusses expansion, it also points to structural deficiencies. The Ministry of Housing and Urban Affairs (MoHUA) standards recommend 40-60 buses per lakh of population, but numerous cities fall far short of this target. The survey neither measures city-level performance in meeting these standards nor correlates bus fleet size with service quality performance.

• Congestion as an Economic Variable: The survey also takes a scattered view of road congestion rather than treating it through a consolidated lens. Several studies, including the one by the Centre for Science and Environment, cite external empirical research to reveal that traffic congestion in Delhi, for example, results in a loss of income of INR 7,200 to INR 19,600 for unskilled workers, INR 8,300 to INR 23,800 for skilled workers, and INR 9,000 to INR 25,900 for highly skilled workers. The Institute for Social and Economic Change, on the other hand, estimates that late arrivals due to congestion cost Bengaluru 7.07 lakh lost productive hours in 2018, with a corresponding loss of INR 7 billion. Similarly, a 2018 estimate by Uber and the Boston Consulting Group puts the annual cost of congestion in Delhi, Mumbai, Bengaluru, and Kolkata at around US$22 billion.

These figures have analytical significance. They suggest that congestion is not just a local problem but a macroeconomic one, as it reduces labour supply, lowers incomes, and undermines competitiveness. The survey even recommends economically sensible policies such as congestion pricing and demand-based parking reform. However, these estimates of congestion costs are illustrative rather than institutionally grounded. They are not systematically incorporated into a national accounting of time losses.

congestion is not just a local problem but a macroeconomic one, as it reduces labour supply, lowers incomes, and undermines competitiveness.

• Inputs Without Outcomes: Despite the availability of infrastructure data, the survey does not provide integrated results on indicators such as average urban commute times, urban travel speeds, modal splits (buses, metro, private vehicles, walking, cycling), and jobs accessible by public transport within 30-60 minutes. This is surprising, given the document's otherwise numerical nature. While the survey measures infrastructure kilometres and quantifies corresponding budgetary allocations, it fails to quantify accessibility, which is the ultimate goal of urban transport.

Equally, while it quantifies the extent of operational metro network expansion (1,036 km), it does not systematically report performance metrics for ridership or mode shift. Such broad-brush analysis, again, provides an infrastructure narrative, but lacks an outcomes framework.

• Planning Reforms Without Reforming Governance: The survey suggests that all cities with populations of over one million should develop 20-year GIS-based master plans, multimodal mobility frameworks, and designated Special Planning Zones, which are aligned with best international practices. Mobility systems must shape cities rather than respond to them. However, it overlooks the problem of institutional fragmentation, in which India’s urban transport governance is typically shared among municipal corporations, state transport departments, development authorities, and traffic police. Without a strong metropolitan transport authority, long-term planning will remain a distant dream.

The economic survey showcased two parallel narratives. On the one hand, it attempted to provide data on infrastructure inputs but did not integrate these figures into a coherent mobility performance framework. If cities contribute up to 70 percent to the national gross domestic product (GDP) and are expected to house 600 million people in the next decade, then commute times, service quality, and accessibility must be considered as critical macroeconomic variables, not merely secondary statistics.

If cities contribute up to 70 percent to the national gross domestic product (GDP) and are expected to house 600 million people in the next decade, then commute times, service quality, and accessibility must be considered as critical macroeconomic variables, not merely secondary statistics.

Toward an Outcome-Oriented Urban Transport Framework

Next year’s Economic Survey, thus, requires the following three major analytical transitions from an urban transport perspective:

• From Assets to Accessibility: It must measure infrastructure not only by kilometres of roads built but also by reductions in commute times and improvements in job accessibility.

• From Electrification to Efficiency: The survey must propose a climate-resilient transport policy that focuses on buses, shared mobility, and non-motorised transport, as well as electric vehicles, and incorporates transport efficiency parameters.

• From Fragmentation to Integration: It must propose comprehensive governance reforms, accompanied by planning reforms, to ensure that transport investments deliver measurable gains in productivity.

The Economic Survey 2025-26 offers the data to make this transition. What is needed is to ensure that mobility outcomes are treated as fundamental economic statistics. Otherwise, India will be measuring what it builds rather than what it enables in its cities. In an economy that is becoming increasingly urban, mobility is no longer a sectoral service but the lifeblood of productivity. The Economic Survey needs to treat it as such.

Nandan H Dawda is a Fellow with the Urban Studies programme at the Observer Research Foundation.

• Urbanisation in India
• Urbanisation
• India
• economic survey 2025-26
• regional rapid transit system
• rrts in india
• urban mobility
• urban mobility framework
• urban mobility infrastructure
• urban mobility infrastructure in india

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