Budget 2026-27: Sitharaman Proposes 4,000 E-Buses for East India Industrial Corridor

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Clean-energy buses to Support Growth, Jobs, and tourism in eastern states

Finance Minister Nirmala Sitharaman announced a major clean transport plan in the Union Budget 2026-27. Under this proposal, the government plans to deploy 4,000 electric buses across five eastern states. This move comes under the “Purvodaya” initiative, which focuses on the overall development of East India. The plan aims to improve public transport, reduce pollution, and support economic growth in the region.

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In addition, the Budget includes the development of an Integrated East Coast Industrial Corridor. Durgapur will act as a key node in this corridor. Along with this, the government plans to develop five new tourism destinations in the eastern region. These tourist locations will use the new electric bus fleet, which may improve travel comfort and reduce emissions.

Purvodaya initiative links transport with industry and tourism

The electric bus plan does not stand alone. Instead, it connects with industrial growth and tourism development. Better public transport will help workers travel easily, while tourists may enjoy cleaner and quieter journeys. Moreover, electric buses will help cities reduce fuel costs and air pollution. However, smooth execution will remain important to achieve these goals.

PM e-Bus Seva and PM E-DRIVE schemes strengthen the push

The new announcement builds on existing government schemes. The PM e-Bus Seva scheme, launched in August 2023, aims to deploy 10,000 electric buses in 169 cities. The scheme has a total outlay of ₹57,613 crore and works on a public-private partnership model. Through this model, private operators supply buses, while cities ensure regular payments.

In addition, the PM E-DRIVE scheme supports this effort. Launched in October 2024 with an outlay of ₹10,900 crore, the scheme provides ₹4,391 crore to buy 14,028 electric buses for state transport bodies by March 2026. To protect private players, the government also runs a Payment Security Mechanism worth ₹3,435.33 crore. This system reduces payment risks and improves confidence among operators.

Electric bus market shows steady growth in India

India’s electric bus market continues to grow, although at a gradual pace. The market share rose from 4% in FY24 to nearly 5% in FY25. As of July 2025, the government has approved 7,293 electric buses across 14 states and four Union Territories under PM e-Bus Seva.

In 2024, electric buses formed 12.5% of the heavy passenger vehicle segment, with 3,616 new registrations. To support this growth, the government has installed 8,885 public charging stations under FAME-II. In addition, ₹2,000 crore under PM E-DRIVE will help set up around 72,000 new charging stations across India.

Strong manufacturers back future expansion

Five major manufacturers, Tata Motors, Olectra, JBM, PMI, and Switch Mobility, lead the sector. Together, they hold 88% market share and a combined annual capacity of 40,500 electric buses. Industry experts believe electric bus share could reach 10–12% by FY27 and even 15% by 2027. However, success will depend on charging infrastructure, policy support, and wider incentives for private operators.