Private bus operators cannot avail of any subsidy for transitioning to electric buses; an interest subvention scheme could help them make this shift. The Ministry of Heavy Industries is considering a scheme comprising an interest subvention, the development of charging infrastructure, and the mitigation of risks associated with e-bus financing.
Prasanna Patwardhan, President, Bus and Car Operators Confederation of India (BOCI), said the government is considering an interest subvention, as it cannot provide grants to private bus operators. Government buses get a subsidy of 50-55 lakh per bus. “Interest subvention will certainly help because that will reduce our burden to some extent,” Patwardhan said. However, banks are reluctant to fund private electric buses.
According to Patwardhan, the industry wants common charging infrastructure, financial assistance and funding from banks, and this funding has to be for both buses and charging infrastructure (project finance) under priority lending with a longer tenure of 8-10 years. These steps will accelerate bus electrification in the private sector.
According to Patwardhan, there is a strong policy bias and mindset against private bus operators in the country, whether it is ICE vehicles or electric buses, even though 96% of the 26 lakh buses in the country are privately owned. Private bus owners have been denied subsidies for the electrification of their bus fleet, have been edged out from bus terminals, and have no access to charging infrastructure or EV financing, he points out. They do not allow private buses to enter the premises or go within 200 meters of the bus station.
Government Subsidies and Fleet Volume
“Airlines carry about 5 lakh people per day, Indian Railways carries about 2.5 crore people every day, and all metros put together carry about 1.5 crore per day. Buses carry about 40 crore people. Of that, about 6.5 crore people are carried by government buses. And a balance of 33.5 crore people is carried by private operators,” Patwardhan said. If the same incentives had been provided to private operators, the country would have had 2,00,000 electric buses on the road, not the 20,000 e-buses it has reached so far. EV subsidy is only available for the government’s fleet of 1.5 lakh buses.
BOCI is an industry body for all private bus and car operators in India, with a direct and indirect membership of 25,000. It will submit a white paper to the government on this after deliberations at the fifth edition of Prawaas.
Outdated Regulatory Framework
There are about 26 lakh buses in India. Around 90% of operators have fewer than 10 buses. Only about 2-3% have a fleet of more than 100 buses. He blames the outdated British-era Motor Vehicle Act for stifling the growth of the bus sector. Small players dominate the business, and competition is on price, not on quality.