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Budget 2021: Boost for public transport; Rs 18K crore for bus services

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Sitharaman said the government will provide for augmenting the share of public transport in urban areas by expanding the metro network and city bus services for improving last-mile connectivity.

Budget 2021: Boost for public transport; Rs 18K crore for bus services
Union finance minister Nirmala Sitharaman on Monday has announced a scheme to strengthen public transport infrastructure in the country's urban centers in her Budget 2021 speech. The move will likely boost sales of new buses, a segment of the auto sector which was decimated during COVID-19.
Addressing health and environmental concerns, Sitharaman said the government will provide for augmenting the share of public transport in urban areas by expanding the metro network and city bus services for improving last-mile connectivity.
"A scheme will be launched at the cost of Rs 18,000 crore to support augmentation of public bus transport services," the FM announced, adding, "The scheme will enable deployment of innovative PPP models to enable private players to finance, acquire, operate, maintain over 20,000 buses."
"With government's higher focus on metro and increase in outlay for urban transport, we are likely to see the much needed demand for buses and smaller vehicles for last mile connectivity," Rajeev Singh, partner and automotive leader, Deloitte India said.
The scheme will boost the automobile sector, create jobs, provide fillip to economic growth, enhance ease of mobility for urban residents, the finance minister said.
The metro projects which will be expanded include: the Chennai Metro Rail Rail Phase 2, Bengaluru Metro Railway Project, Nagpur Metro Rail Phase 2 and Nashik Metro. The move will benefit bus operators and manufacturers of buses including Ashok Leyland, Volvo Eicher Commercial Vehicles, Force Motor and Tata Motors.
The Society of Automobile Manufacturers, SIAM, had recommended the government set up a dedicated budget for acquisition of buses by state transportation undertakings.
However, the bus and tours and travel operators sector isn't too happy with the Budget, as specific measures from travel and hospitality were not announced in the Budget.
"It was expected that the government will bring in some scheme to rejuvenate badly hit travel and tourism sector but unfortunately FM did not even utter a single word about travel and tourism. For passenger transport sector, particularly in urban transport, government will infuse money to ensure sustainable public transport systems," Prasanna Patwardhan, president, Bus & Car Operators Confederation of India (BOCI) said.
"For goods transportation, more emphasis is given on development of railway freight corridors and development of more National highways under PPP. Overall, from transporters' point of view it is not an encouraging budget," Patwardhan said.