India's urban bus transport system is in a state of crisis, with more than 400 cities having no organised bus service at all, according to a new study by the Centre for Science and Environment (CSE) and CITIES Forum released on August 10, 2026. The study, titled "The Economics of Bus Transformations: A Roadmap for Viksit Bharat 2047," warns that the country needs an investment of Rs 14.2 lakh crore, or roughly 165 billion dollars, over the next two decades to fix the sector.
The report says India's urban population is expected to grow from 490 million now to 763 million by 2047, adding 270 million more city residents. Against this growing demand, the country currently has only about 65,000 organised urban buses, giving just over 13 buses per lakh population, far below the government's benchmark of 44 buses per lakh. This amounts to a 70 per cent shortfall in urban transit capacity nationwide.
To close this gap, the study says India's bus fleet must expand tenfold, from 65,000 to 6.71 lakh buses by 2047, while also shifting away from polluting diesel vehicles toward electric buses. Compounding the crisis, 40,000 buses currently in service are already overaged, consuming 20 to 30 per cent more fuel and costing more to maintain, while 5.8 lakh buses across all categories are expected to reach the end of their operational life between 2026 and 2030.
Five states, Madhya Pradesh, West Bengal, Uttar Pradesh, Maharashtra and Karnataka, together account for 55 per cent of the country's active bus fleet, highlighting sharp regional disparities. Many State Transport Undertakings are also in deep financial distress, with losses often exceeding their annual revenues.
The study recommends that India ramp up its annual bus procurement nearly 17-fold, from about 2,500 buses a year currently to an average of 41,500 buses annually, in order to meet demand and support a 90 per cent electric fleet transition by 2047. It also calls for expanding domestic manufacturing capacity, noting that top manufacturers currently use less than 10 per cent of their electric bus production capacity.
On financing, the report says existing schemes such as FAME and PM e-Bus Sewa are too fragmented to meet the scale of investment needed. It calls for the launch of a National Urban Bus Mission backed by a dedicated Urban Bus Electrification Fund, along with state-guaranteed Green Bus Bonds, results-based financing, and tax reforms to ease the financial burden on bus operators.
Anumita Roychowdhury, Executive Director of Research and Advocacy at CSE, said transforming bus transit is essential for clean air, energy security and climate goals under the Viksit Bharat 2047 vision, adding that buses can take 40 to 50 private cars off the road each and help secure a 70 to 75 per cent public transport share in cities.
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