Budget 2026-27: 4,000 Electric Buses Planned for East India to Boost Industry and Tourism

Key Highlights

• 4,000 electric buses proposed for five eastern states under Budget 2026-27.

• Plan launched under Purvodaya initiative to boost clean transport and growth.

• Electric buses linked with East Coast Industrial Corridor and tourism hubs.

• PM e-Bus Seva and PM E-DRIVE schemes support large-scale e-bus rollout.

• Strong charging infrastructure and manufacturers back future expansion.

Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2026-27, announced a major clean mobility push for eastern India. Under this proposal, the government plans to deploy 4,000 electric buses across five eastern states as part of the Purvodaya initiative, which focuses on the overall development of East India. The move aims to strengthen public transport, cut pollution levels, and support economic activity in the region.

Electric Buses Linked to Industrial and Tourism Development

The electric bus deployment is closely linked with the government’s broader development plans. The Budget also announced the creation of an Integrated East Coast Industrial Corridor, with Durgapur set to emerge as a key node. Alongside industrial growth, the government will develop five new tourism destinations in eastern India.

These tourism hubs are expected to benefit directly from the new electric bus fleet, offering cleaner, quieter, and more comfortable travel for visitors. At the same time, improved public transport will help workers commute easily to industrial areas, supporting employment and regional growth.

Purvodaya Initiative Focuses on Clean and Connected Growth

Under the Purvodaya initiative, the government is linking clean transport with industry and tourism. Electric buses will help reduce fuel costs for states, lower emissions in cities, and improve the quality of urban transport. The success of this plan, however, will depend on timely execution, reliable charging infrastructure, and coordinated efforts between central and state authorities.

PM e-Bus Seva and PM E-DRIVE Schemes Strengthen the Push

The Budget 2026-27 announcement builds on existing central government schemes. The PM e-Bus Seva scheme, launched in August 2023, targets the deployment of 10,000 electric buses across 169 cities. The scheme has a total outlay of ₹57,613 crore and follows a public-private partnership (PPP) model, where private operators supply buses and city authorities ensure regular payments.

In addition, the PM E-DRIVE scheme, launched in October 2024 with an outlay of ₹10,900 crore, supports the purchase of 14,028 electric buses for state transport undertakings by March 2026. Out of this, ₹4,391 crore is allocated specifically for bus procurement. To reduce payment risks for private players, the government has also set up a Payment Security Mechanism worth ₹3,435.33 crore, improving confidence among operators.

Electric Bus Market Continues Steady Growth

India’s electric bus market is showing consistent progress. The market share increased from 4% in FY24 to nearly 5% in FY25. As of July 2025, 7,293 electric buses have been approved across 14 states and four Union Territories under the PM e-Bus Seva scheme.

In 2024, electric buses accounted for 12.5% of the heavy passenger vehicle segment, with 3,616 new registrations. To support this expansion, the government has already installed 8,885 public charging stations under the FAME-II scheme. Further, ₹2,000 crore under PM E-DRIVE will be used to set up around 72,000 new charging stations across the country.

Major Manufacturers Support Future Expansion

The electric bus ecosystem is backed by strong domestic manufacturers. Tata Motors, Olectra, JBM, PMI, and Switch Mobility together control 88% of the market and have a combined annual production capacity of 40,500 electric buses. Industry estimates suggest that electric buses could account for 10–12% of the market by FY27 and reach 15% by 2027, provided charging infrastructure, policy support, and incentives for private operators continue to improve.

Also Read: Ashok Leyland January Sales Report 2026: 38% YoY Growth, 19,500 Units Sold

CMV360 Says

The proposal to deploy 4,000 electric buses under Budget 2026-27 highlights the government’s focus on clean mobility and balanced regional development. By connecting electric transport with industrial corridors and tourism projects in eastern India, the Purvodaya initiative aims to create jobs, reduce pollution, and improve travel experience. With strong policy backing and growing industry capacity, electric buses are set to play a key role in India’s future public transport system.