India is experiencing a rapid urbanisation and economic growth, which is fuelling the growth of private transport in the country.  Currently, India has around 191.7 million registered vehicles as of 31 March 2016 (Source: Vahan Database). The Compound Annual Growth Rate of total Registered Motor Vehicles in India for the last 5 years i.e. from 2011 to 2016 was 94.40%. This trend clearly shows that there is large dependence on private vehicles. The increase in number of vehicles expected to be on roads during the next five years depends on the new policy of State Government and Government of India. 

The National Sample Survey Office (NSSO), Ministry of Statistics and Programme Implementation (MoSPI), Government of India conducted annual surveys by collecting large samples on diverse social-economic aspects, including key indications of household expenditure on service and durable goods in India.

Source: Wikipedia

The survey covers both rural and urban India. One of the key components of NSSO Household Survey is expenditure on transport. According to NSSO report, buses are the most preferred mode of transport in both rural and urban India, followed by auto rickshaws. Both types of journey are included in domestic purpose or for entrepreneurial activity for the survey.

%age of Households reporting Expenditure on different modes of Transport

Expenditures on Bus / Tram, Auto Rickshaw, Taxi and Train account for more than 90% of the total expenditure on Transport both in rural and urban areas. Expenditure share of railways as mode of transport contributes much higher proportion in urban areas (12.5%) than that in rural areas (4.4%).

Auto rickshaws are used by about 38% rural households and about 47% urban households. Taxi, railways and rickshaw are the other major modes of transport, both in rural and urban areas.

This clearly shows that the government should make more investment in bus transport. According to estimates from ICRA Limited, an independent Indian credit rating and investment information agency, 100 of the largest Indian cities require approximately $15.4bn to procure 150,000 new buses and upgrade ancillary transport infrastructure. It will be difficult for State governments or local bodies to invest such a large sum without further federal government support.