Abstract:

The scheme is a strategic initiative approved by the Union Cabinet, chaired by Prime Minister Shri Narendra Modi, to accelerate the adoption of electric buses (e-buses) across India. With a financial outlay of ₹3,435.33 crore. It aims to support the deployment of over 38,000 e-buses from FY 2024–25 to FY 2028–29, enabling their operation for up to 12 years from the date of deployment. Recognizing the environmental impact of diesel/CNG-powered public buses and the challenges Public Transport Authorities (PTAs) face in financing high-capital-cost e-buses, the scheme promotes procurement through the Gross Cost Contract (GCC) model. Under this model, private operators or OEMs procure and operate e-buses, while PTAs make monthly payments without incurring upfront costs. To address operator concerns regarding potential payment defaults by PTAs, the Payment Security Mechanism ensures timely disbursement of payments through a dedicated fund managed by Convergence Energy Services Limited (CESL). In case of PTA default, CESL will release payments from the scheme funds and recover them from the respective PTAs or States/UTs. This initiative encourages private sector participation, enhances the financial viability of electric mobility projects, and significantly contributes to reducing greenhouse gas emissions and fossil fuel consumption. It is a transformative step towards sustainable urban mobility, benefiting PTAs across all participating States and Union Territories.