The Government of India's Ministry of Urban Development announced in January that states will receive financial assistance for purchasing public transport buses, as part of a national effort to reduce the use of private vehicles and control congestion.

The new financing scheme will allocate $58 billion to 63 cities under the Jawaharlal Nehru National Urban Renewal Mission, a government program established in 2005 to help modernize and improve the quality of life in Indian cities. The stimulus package is a one-time assistance grant and will be available for the purchase of urban transport buses until June 30.

The plan also includes built-in incentives to reduce private vehicle use and revenue-generating schemes for "dedicated urban transport funds" to support transport projects like BRT and metro networks. At the state level, additional sources of funding will come from things like sales tax on petrol and vehicle registration fees. At the city level, funds will come from parking fees, property development tax and advertisement revenue from transport corridors.

"The incentive package will continue to change how Indian cities approach transport, placing the needs of the majority first through non-motorised and public transport," EMBARQ Senior Transport Engineer Dario Hidalgo says.

The Centre for Sustainable Transport India is advising the city of Indore in preparing a proposal, known as a "Detailed Project Report," for bus procurement and organizational development of the Indore City Transport Services, Ltd. The proposal will include information regarding things like a sustainability analysis, planning, financing, operations and maintenance.

Download the full JnNURM guidelines here.

Related news article:
"Owning a car could get more expensive", The Times of India, Jan. 15, 2009