Abstract:

The PM-eBus Sewa – Payment Security Mechanism (PSM) Scheme, approved by the Government of India with an outlay of ₹3,435.33 crore, is designed to support the deployment and operation of over 38,000 electric buses across India from FY 2024–25 to FY 2028–29. The scheme's guidelines outline a structured approach to mitigate payment risks faced by private operators and Original Equipment Manufacturers (OEMs) under the Gross Cost Contract (GCC) model.

Under the guidelines, Public Transport Authorities (PTAs) partner with private operators to deploy e-buses without incurring upfront capital expenditure. Instead, PTAs make monthly payments for bus operations. To ensure payment reliability, a Payment Security Mechanism is instituted, with Convergence Energy Services Limited (CESL) acting as the implementing agency.