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Electric Buses in India: Emerging Issues and Policy Lessons

Attribution:

Promit Mookherjee and Kushan Mitra, Electric Buses in India: Emerging Issues and Policy Lessons, March 2022, Observer Research Foundation.

Introduction

In most developing countries, public transport is the primary means for people to access employment, community resources, medical care, and recreation. In India, public buses remain the most affordable means of travel and an enabler of economic activity. According to a survey by the Ministry of Statistics and Programme Implementation (MoSPI) in 2015, about 66 percent of households in urban areas reported expenditure on buses to be the highest among all modes of travel that they used. The monthly per capita expenditure was also found to be highest for buses in both urban (INR 94.89) and rural areas (INR 43.43).[1]

The modal share of public transport in India has historically been high. However, public transport infrastructure in Indian cities has failed to keep pace with population growth in these urban spaces.[2] The bus fleet, for example, remains highly inadequate. A NITI Aayog study in 2018[3] estimated that India has only 1.3 buses for every 1,000 people, much lower than other developing countries such as Brazil (4.74 per 1,000) and South Africa (6.38 per 1,000).[4] The lack of buses has led to commuters increasingly moving away from public transport. The erstwhile Ministry of Urban Development (MoUD)—now the Ministry of Home and Urban Affairs (MoHUA)—had sanctioned two comprehensive mobility studies—one in 1994, and another in 2007. The decline in the modal share of public transport in the period between the two studies highlights the changing preference of Indian commuters (See Table 1).[5] The drop is most evident in the larger cities, in some cases like Delhi as high as 25 percent. The severe shortage of buses has increasingly pushed commuters towards personal transport. Indeed, India is the world’s largest market for two-wheelers, which are significant contributors to increased traffic congestion, greenhouse gas emissions, and the worsening of air pollution.[6]

Source: Ministry of Housing and Urban Affairs (MoHUA), 2008 5

At the same time, the continued reliance of the riding public on the current fleet of buses brings with it certain environmental challenges. For one, buses plying India’s streets are almost exclusively dependent on diesel, accounting for 10 percent of total diesel consumption in the country.[7] According to estimates from the India GHG program, a bus in an urban area in India emits on average 0.015 kg CO2 per passenger-kilometer.[8] Publicly owned buses cover 566 billion passenger-kilometers annually, within and across cities[9]—this translates to some 8 million tons of CO2 emissions from publicly owned buses, which account for only 7 percent of the total bus population.[a]  Furthermore, only one percent of registered buses conform to the latest air pollutant emission norms (Bharat Stage-VI).[10]

The deployment of electric buses is seen as an opportunity to decouple the negative externalities of bus travel from the augmentation of a currently inadequate fleet. In particular, e-buses can be an effective solution for the intra-city segment where the daily travel range is low and planning for recharging infrastructure is easier. Unlike their ICE (internal combustion engine) counterparts, electric buses have zero tailpipe emissions, lower noise pollution, and are touted to provide a better commuter experience.  As a result, these buses have been receiving a large push from policymakers at both national and sub-national levels. In many ways, electric buses have brought back attention to the historically neglected public bus service, with many state governments announcing electric bus procurement programs.  However, the market for electric buses today is not market-driven but defined by purposive government policies, in terms of both demand and supply.  This study aims to assess the current policy focus for electric buses and identify implementable lessons for the future.

The first part of the study deals with the challenges associated with the high capital investments needed for electric buses compared to their ICE counterparts. Thus far, the uptake of electric buses in India has been driven by government subsidies directed only towards publicly owned enterprises. This report aims to assess whether the present strategy can ensure an effective long-term uptake of electric buses in the country. Further, it is important to ensure that diverting public resources for electric buses does not result in reduced funding for the broader improvements needed in the public bus system. To this end, the report evaluates the trade-offs associated with investment in electric buses and identifies implementable policy lessons for the future.

The second part of the study explores the implications of the electric mobility transition on the manufacturing ecosystem. At present, the ICE-based manufacturing ecosystem contributes significantly to the economy in terms of value added and employment generation. The economic co-benefits from the transition to electric vehicles will depend on the ability to build up domestic production capabilities to reduce imports, create new businesses, and generate employment. This will require a favourable industrial policy that can accelerate innovation and incentivise firms to channel resources to building up local capabilities. In this context, the study analyses the present industrial policy on electric vehicles, with a particular focus on buses. It evaluates the present status of the electric mobility manufacturing landscape, highlighting the implications for national value added, employment generation, and raw material dependence.

The study relies on policy documents, data from secondary sources, existing literature on the subject, and extensive consultations with stakeholders including government officials, automobile manufacturers, industry bodies, and private research organisations.[b]

Read the full report here.


(This report was prepared by ORF with support from Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the German Development Institute (DIE). The study is part of a larger collaborative international project of the DIE and the United Nations Economic Commission for Latin America and the Caribbean (UN-ECLAC). The recommendations and the views expressed herein are, however, those of the researchers and do not reflect the formal position of the supporting organisations.)

Promit Mookherjee is an Associate Fellow at ORF’s Centre for Economy and Growth.

Kushan Mitra is a journalist with over two decades of experience and has covered the global automotive, mobility and transportation industries extensively.


[a] Assuming the same emission factor for intra and intercity operations due to lack of separate estimates. This is likely to be slight overestimate since fuel efficiency for intercity operations may be slightly higher.

[b] All interviews were done without attribution, to ensure a candid exchange of views. The participants in these consultations are listed in the Annex.

[1] Press Information Bureau, Household expenditure on services and durable goods NSS 72nd round (July, 2014 –June, 2015), 2016.

[2] Geetam Tiwari, “Urban transport priorities: meeting the challenge of socio-economic diversity in cities, a case study of Delhi, India.” Cities 19, no. 2 (2002): 95-103.

[4] International Road Federation, World Road Statistics, 2018.

[6] John Pucher, Nisha Korattyswaropam, Neha Mittal, and Neenu Ittyerah. “Urban transport crisis in India.” Transport Policy 12, no. 3 (2005): 185-198.

[7] Nielsen, All India Study on Sectoral Demand of Diesel & Petrol, 2013.

[8] India GHG Program, India Specific Road Transport Emission Factor, 2015.

[9] Ministry of Road Transport and Highways (MoRTH), Review of the Performance of State Road Transport Undertakings for April, 2016 – March, 2017, 2018.

[10] Ministry of Road Transport and Highways (MoRTH), Vahan4 Statistics, January 10,2022.

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Authors

Promit Mookherjee

Promit Mookherjee

Promit Mookherjee is an Associate Fellow at the Centre for Economy and Growth in Delhi. His primary research interests include sustainable mobility, techno-economics of low ...

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Kushan Mitra

Kushan Mitra

Kushan Mitra is a journalist with over two decades experience covering the global automotive mobility and transportation industries extensively.

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