Publication: Public Transport Subsidies and Affordability in Mumbai, India
Date
2007-11
ISSN
Published
2007-11
Author(s)
Cropper, Maureen
Bhattacharya, Soma
Abstract
This paper describes the role of public
transport and the nature and incidence of transport
subsidies in Mumbai, India. Mumbai has an extensive rail
and bus network, and public transport is used for over 75
percent of all motorized trips in Greater Mumbai. Both rail
and bus fares in Mumbai are subsidized: BEST, which
operates public buses in Mumbai, is also an electric
utility, and subsidizes bus fares from electricity revenues.
We analyze the incidence of these subsidies, and their
effect on mode choice, using data from a survey of
households in Greater Mumbai. In Mumbai, as in many cities,
the middle class is more likely to use public transport for
travel than the poor. The poor, however, also use public
transit, and their expenditure on public transit
constitutes, on average, a larger share of their income than
it does for the middle class. It is, therefore, the case
that the poor benefit from transit subsidies in Mumbai, as
well as the middle and upper-middle classes; however, the
poorest 27 percent of the population receives only 19
percent of bus subsidies and 15.5 percent of rail subsidies.
Indeed, 26 percent of the lowest income households surveyed
do not use rail, while 10 percent do not use bus, implying
that they receive no transit subsidies. Expenditure on
transport accounts for 16 percent of income in the lowest
income category (<5000 Rs./month), with 10 percent of
income, on average, spent on bus and rail fares. This
percentage, however, is not evenly distributed: it is much
higher than 10 percent for households in which workers take
the bus or train to work, and lower for households in which
the main earner walks to work. Even in these households,
however, 12.5 percent of income is spent on transportation.
Expenditure on public transport would be even higher if bus
fares in Mumbai were not subsidized. In 2005-2006,
transport revenues of BEST fell below total costs by 30
percent and below operating costs by 20 percent. Rail fares,
which are much lower than bus fares per km traveled,
officially covered operating costs and almost covered
depreciation expenses.
Citation
“Cropper, Maureen; Bhattacharya, Soma. 2007. Public Transport Subsidies and Affordability in Mumbai, India. Policy Research Working Paper; No. 4395. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/dcb319f0-7d6b-528c-b041-804985b848f5 License: CC BY 3.0 IGO.”
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