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

Finance Minister Nirmala Sitharaman announced on February 1, 2026, the deployment of 4,000 electric buses across five eastern states as part of a major infrastructure push under the "Purvodaya" initiative in the Union Budget 2026-27. The proposal includes development of an Integrated East Coast Industrial Corridor with Durgapur designated as a primary node, alongside creation of five new tourism destinations in the region to be served by the clean-energy fleet.

The initiative builds on the government's existing electric mobility framework, currently driven by the PM e-Bus Seva and PM E-DRIVE schemes. Launched in August 2023 with a total outlay of ₹57,613 crore, the PM e-Bus Seva scheme aims to deploy 10,000 e-buses in 169 cities through a public-private partnership (PPP) model.

This is supported by the ₹10,900-crore PM E-DRIVE scheme launched in October 2024, which provides ₹4,391 crore specifically for the procurement of 14,028 e-buses by state transport undertakings through March 2026. To ensure financial viability, the government also operates the ₹3,435.33-crore Payment Security Mechanism (PSM) approved in October 2024, which protects private operators against payment defaults by state authorities.

India's electric bus sector has recorded growth, with market share rising from 4% in fiscal 2024 to approximately 5% in fiscal 2025. As of July 2025, the government has sanctioned 7,293 e-buses across 14 states and four Union Territories under the PM e-Bus Seva framework.

Five Manufacturers Hold 25,000-Bus Order Book

In 2024, electric buses achieved a 12.5% market share within the heavy passenger vehicle segment, with 3,616 units registered during the year. To support this growing fleet, the government has installed 8,885 public charging stations as of July 2025 under FAME-II, with an additional ₹2,000 crore earmarked under PM E-DRIVE to establish approximately 72,000 new charging stations nationwide.

The industry is backed by strong manufacturing capacity, with the top five manufacturers—Tata Motors, Olectra, JBM, PMI, and Switch Mobility—controlling 88% of market share and maintaining a combined capacity of 40,500 e-buses annually.

Industry projections suggest electric bus market share could reach 10-12% by FY27 and potentially 15% by 2027, though expansion will require addressing infrastructure gaps and extending incentives to private operators, who currently represent 90% of India's bus fleet.