“Free Bus Schemes and Conveyance Expenditure in India”

• The World Bank report highlights India’s efforts to reduce extreme poverty, with a decrease from 16.2% in 2011-12 to 2.3% in 2022-23.

• The Household Consumption Expenditure Survey (HCES) shows that per capita household expenditure in 2023-24 was ₹4,122 in rural India, and ₹6,996 in urban India.

• Food accounted for 47% of expenditure in rural India, while 39% in urban India.

• Conveyance expenditure, including bus, metro, flights, and other modes, accounted for 14% of total non-food expenditure across both rural and urban India.

• Bus expenditure contributed to 20% of the total conveyance expenditure, largely due to lower per capita income in rural India.

• Bus travel accounts for a higher share of conveyance expenditure in rural areas compared to urban ones, with 20.6% in rural India and only 16.2% in urban areas.

• State governments have provided free bus services for women, but mixed evidence exists on the impact of these schemes on household consumption expenditure on buses.

• The share of bus expenditure to conveyance expenditure is greater among higher-income households than lower-income households, possibly due to their involvement in the agricultural sector.

• Policymakers should develop policies and infrastructure to cushion the cost of conveyance expenditure, such as transitioning from Internal Combustion Engine buses to electric buses, increasing the supply of buses, and improving the quality of buses.