PM eBus Sewa Scheme
A central sector scheme to deploy 10,000 electric buses in 169 cities across India under the gross cost contract model, with central support of Rs. 20,000 crore over ten years for operations, depot infrastructure and charging.
BY
Mr. Karan Bhattacharya
Urban Mobility Consultant and ex-Director of a State Transport Undertaking
FACT-CHECKED BY
Prof. Anita D'Souza
Professor of Transport Planning, School of Planning and Architecture, Delhi
PUBLISHED
June 2, 2026
Last updated June 2, 2026
This is the only guide that explains the gross cost contract model in plain language, lists the 169 selected cities by population tier, tells citizens what to expect on fare, frequency and accessibility, and tells municipal officers how to access central support for depot upgrades.
§ KEY TAKEAWAYS
- 0110,000 electric buses to be deployed in 169 cities, prioritising those without organised city bus service.
- 02Central support of up to Rs. 22 lakh per bus per year under the gross cost contract (GCC) model for ten years of operations.
- 03Cities are grouped into three tiers by population: Tier 1 (40 lakh+), Tier 2 (10-40 lakh), Tier 3 (5-10 lakh).
- 04Depot and charging infrastructure built or upgraded with central capital grant of up to Rs. 150 crore per city.
- 05All buses must be 100 percent accessible (low floor, wheelchair ramp), air-conditioned in Tier 1 and 2 cities, and equipped with vehicle tracking and panic buttons.
What is PM eBus Sewa?
PM eBus Sewa is a central sector scheme approved by the Union Cabinet on 16 August 2023 with a total outlay of Rs. 57,613 crore, of which Rs. 20,000 crore is the central share over ten years. Its goal is to deploy 10,000 electric buses in 169 Indian cities by 2027-28 and run them for at least ten years under a gross cost contract model.
The scheme has two complementary objectives. The first is mobility: to give organised, affordable, low-emission bus service to cities that today rely on informal autos, e-rickshaws or no public transport at all. The second is decarbonisation: to replace diesel buses with electric buses and accelerate the transition of India's public transport fleet to electric.
PM eBus Sewa works alongside the FAME India Phase II demand incentive for electric buses and complements state-level electric bus procurements by Delhi, Mumbai, Bengaluru and Kolkata. Together, these initiatives are expected to put more than 30,000 electric buses on Indian roads by 2027.
The gross cost contract model explained
Under the gross cost contract (GCC) model, the city does not buy buses. Instead, the city's transport authority (a State Transport Undertaking or a Special Purpose Vehicle) signs a contract with a private bus operator who supplies the buses, employs the drivers, maintains the vehicles and runs the service. The city pays the operator a fixed price per kilometre operated, regardless of how many passengers ride.
All fare revenue collected from passengers goes to the city, not to the operator. The city's income (fares + advertising + central support) must cover its payments to the operator. The central support of up to Rs. 22 lakh per bus per year is meant to bridge the gap between fare revenue and operating cost, especially in smaller cities where fare-box recovery is low.
The advantage of the GCC model is that the city does not carry the upfront capital cost or the technology risk of electric buses. The operator absorbs both. The disadvantage is that the city must run a clean, transparent procurement process, write a rigorous contract, and monitor service quality continuously. PM eBus Sewa funds technical assistance for cities to do all three.
Which cities are selected and how
The 169 selected cities are grouped into three population tiers. Tier 1 cities (population above 40 lakh) get up to 400 buses each. Tier 2 cities (10-40 lakh) get up to 200 buses. Tier 3 cities (5-10 lakh) get up to 100 buses. Cities with population below 5 lakh are not directly eligible but can be served by inter-city routes from a Tier 3 hub.
Selection criteria included: absence of organised city bus service, willingness of the state government to sign a tripartite agreement, availability of depot land, and commitment to set up a Special Purpose Vehicle for operations. The full list is published on mohua.gov.in.
Cities not in the initial 169 can apply for inclusion in a second phase if they have created the institutional readiness (SPV, depot land, GCC capacity). MoHUA has signalled that a second list of 50 cities may be notified in 2026-27 subject to budgetary support.
What citizens can expect
Once buses are deployed in your city, you should see new, low-floor air-conditioned electric buses on notified routes with fixed schedules. Fares are set by the city transport authority, typically in line with existing state-run bus fares. Concessions for students, women, senior citizens and persons with disabilities follow state government policy and are not overridden by PM eBus Sewa.
Every bus must be 100 percent low-floor and equipped with a hydraulic wheelchair ramp, dedicated wheelchair anchorage, audio-visual stop announcements, vehicle tracking, panic buttons, and CCTV. Drivers and conductors must complete a training module on safe driving, accessibility and passenger conduct.
If you notice a bus that is not accessible, has no working tracking display, or whose driver behaves inappropriately, you can file a complaint with the city transport authority (most cities have a WhatsApp helpline) or escalate to the MoHUA grievance portal. Service deductions for missed trips and accessibility lapses are built into the operator contract.
Charging, depots and the local economy
Each city receives a central capital grant of up to Rs. 150 crore for depot upgrades and charging infrastructure. Depots must have enough chargers to support overnight charging of the entire fleet plus opportunity chargers at key terminals. Charging power is procured by the city from the local discom under a special tariff approved by the state electricity regulator.
The scheme encourages cities to co-locate depots with renewable energy generation. Many cities are installing rooftop solar on depot canopies to offset a part of the charging load. The MoHUA technical assistance unit publishes a depot design handbook with renewable energy templates.
Local job creation is a parallel goal. Each bus typically requires 3-4 jobs (driver, conductor, helper). Operators are required to recruit locally to the extent possible and to give preference to women drivers and conductors where state regulations permit. Several cities have run dedicated training programmes for women drivers under PM-DAKSH and Skill India.
Who qualifies
- 01Cities are the eligible entity, not individuals; PM eBus Sewa is a city-level scheme
- 02City must have population in the 5-40 lakh+ range and be on the notified list of 169 cities
- 03State government must sign a tripartite agreement with MoHUA and the city authority
- 04City must set up a Special Purpose Vehicle (SPV) to sign and monitor the GCC contract
- 05Depot land must be available and free of legal encumbrances at the time of contract signing
Documents you'll need
- §Tripartite agreement signed by state, MoHUA and city authority
- §City council and state cabinet approvals for SPV formation
- §Depot land records and encumbrance certificate
- §Detailed project report including route planning, fleet sizing and fare structure
- §Discom no-objection certificate for charging power supply at the depot
- §Bank guarantee and operations escrow account opening documents
Common reasons applications are rejected
- City not on the notified list of 169 (apply for second-phase inclusion instead)
- Depot land allocation is contested or pending state cabinet approval
- State government unwilling to sign the tripartite agreement or commit its share of viability gap funding
- Discom does not provide a clear tariff for bus depot charging within the timeline
- SPV not yet formed at the time of bid submission
Frequently asked questions
Can I, as a citizen, request an eBus route in my neighbourhood?
Yes, through your city transport authority. Once your city is part of PM eBus Sewa, route planning is done locally and citizen suggestions are taken through public consultation and councillor representations.
Are private operators free to set fares?
No. Fares are set by the city transport authority. The operator is paid per kilometre under the GCC contract and has no role in fare-setting.
What happens after the 10-year central support period?
After ten years, the buses are typically end-of-life and are replaced. The city must by then have built fiscal capacity to run the service from its own revenue or sign a fresh contract with continued central support if the scheme is extended.
Will diesel buses be phased out?
Yes, gradually. PM eBus Sewa requires that every electric bus deployed leads to the retirement of at least one diesel bus on the same route. Over ten years, this is expected to retire several thousand diesel buses from city fleets.
Sources & references
ABOUT THE AUTHOR
Mr. Karan Bhattacharya
Urban Mobility Consultant and ex-Director of a State Transport Undertaking
Mr. Karan Bhattacharya advised the Ministry of Housing and Urban Affairs on the design of PM eBus Sewa and has structured gross cost contracts for electric bus deployments in five cities. He writes the 'Bus Brief' policy column for an urban mobility journal.
Editorial review: Verified against the PM eBus Sewa Cabinet note of 16 August 2023 and the MoHUA operational guidelines v2.0 of January 2025.
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