Public Transport Subsidies and Affordability in Mumbai, India

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.

Bibliographic Details

Main Authors:	Cropper, Maureen, Bhattacharya, Soma
Language:	English
Published:	World Bank, Washington, DC 2007-11
Subjects:	ACCIDENTS, ACCOUNTING, AIR, ARTERIAL ROADS, AVERAGE SPEED, AVERAGE SPEED OF BUSES, BALANCE SHEET, BANK LOAN, BENEFICIARIES, BORROWING, BUS, BUS FARE, BUS FARES, BUS LANES, BUS NETWORK, BUS RIDERS, BUS SERVICE, BUS SERVICES, BUS SUBSIDY, BUS SYSTEM, BUS USE, BUS USERS, BUSES, CALCULATION, CALCULATIONS, CAPITAL INVESTMENT, CAR, CAR USAGE, CARRIAGES, CARS, COMMUTE TRIP, COMMUTER RAIL, COMMUTER RAIL SERVICES, COMMUTERS, COMMUTING, COST OF TRAVEL, DEPRECIATION, DEVELOPMENT BANK, EARNINGS, ELASTICITY, ENGINES, FARE BUS, FARE INCREASE, FARE INCREASES, FARE STRUCTURE, FARES INCREASES, FAST TRAINS, FLOOR SPACE, FUEL, HEADWAY, HOURS OF OPERATION, HOUSEHOLD BUDGETS, HOUSEHOLD EXPENDITURE, HOUSEHOLD EXPENDITURE ON TRANSPORT, HOUSEHOLD INCOME, HOUSEHOLD TRIPS IN TERMS OF DISTANCE, INCOME, INCOME GROUP, INCOME GROUPS, INCOME RANGE, INCOMES, JOURNEY, JOURNEY TO WORK, LONG DISTANCES, MASS TRANSIT, MODAL SHARE, MODAL SHARES, MONTHLY INCOME, MOTOR CYCLE, MOTOR VEHICLE, MOTOR VEHICLE EMISSIONS, MOTORCYCLE, MOTORCYCLES, MOTORIZED TRANSPORT, PASSENGER, PASSENGER KILOMETERS, PASSENGER REVENUES, PASSENGER VOLUME, PASSENGER VOLUMES, PASSENGERS, PASSENGERS DAILY, PASSENGERS PER DAY, PEAK HOURS, PRICE ELASTICITIES, PRIVATE VEHICLES, PUBLIC TRANSIT, PUBLIC TRANSPORT, PUBLIC TRANSPORT AFFORDABILITY, PUBLIC TRANSPORT SUBSIDIES, PUBLIC TRANSPORT SYSTEM, QUESTIONNAIRE, RAIL, RAIL BUS, RAIL EXPENDITURES, RAIL FARES, RAIL LINES, RAIL NETWORKS, RAIL OPERATIONS, RAIL RAIL, RAIL RIDERS, RAIL SERVICE, RAIL SERVICES, RAIL STATIONS, RAIL SUBSIDIES, RAIL SYSTEM, RAIL TRAVEL, RAILWAY, RAILWAY LINE, RAILWAY SECTOR, RAILWAY STATIONS, RAILWAY SYSTEM, RAILWAYS, RAPID GROWTH, REGIONAL PLANNING, RIDERSHIP, ROLLING STOCK, ROUTE, ROUTES, SCHOOL BUS, SCHOOL TRIPS, SOCIAL SERVICES, STANDING PASSENGERS, SUBURBAN RAIL, SUBURBAN RAIL NETWORK, SUBURBAN RAILWAYS, SUBURBAN TRAINS, SUBURBS, TAXIS, TOTAL COST, TOTAL COSTS, TOTAL TRIPS, TRAINS, TRANSIT SUBSIDIES, TRANSIT SUBSIDY, TRANSPORT AFFORDABILITY, TRANSPORT MANAGEMENT, TRANSPORT MODE, TRANSPORT NETWORK, TRANSPORT OPERATIONS, TRANSPORT SECTOR, TRANSPORTATION, TRANSPORTATION ENGINEERING, TRAVEL BEHAVIOR, TRAVEL MODE, TRAVEL PATTERNS, TRIP PURPOSE, TRIPS, TRIPS BY MODE, URBAN TRANSPORT, URBAN TRANSPORTATION, VEHICLE, WAGE, WALKING, WORK TRIPS,
Online Access:	http://documents.worldbank.org/curated/en/2007/11/8683737/public-transport-subsidies-affordability-mumbai-india https://hdl.handle.net/10986/7522
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