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Public transport subsidies and affordability in Mumbai, India

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  • 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 ofthese 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 (

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4395.

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Date of creation: 01 Nov 2007
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Handle: RePEc:wbk:wbrwps:4395

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Keywords: Transport Economics Policy&Planning; Transport in Urban Areas; Urban Transport; Roads&Highways;

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Cited by:
  1. Carlos Henrique Ribeiro de Carvalho & Rafael Henrique Moraes Pereira, 2011. "The Effects of Income and Fare Variation on the Demand for Bus Transit Services in Brazil," Discussion Papers, Instituto de Pesquisa Econômica Aplicada - IPEA 1595, Instituto de Pesquisa Econômica Aplicada - IPEA.
  2. Timilsina, Govinda R. & Dulal, Hari B., 2008. "Fiscal policy instruments for reducing congestion and atmospheric emissions in the transport sector : a review," Policy Research Working Paper Series 4652, The World Bank.
  3. World Bank, 2011. "A Gender Assessment of Mumbai's Public Transport," World Bank Other Operational Studies 12347, The World Bank.
  4. Andrés Gómez-Lobo, 2007. "A new look at the incidence of public transport subsidies: a case study of Santiago, Chile," Working Papers, University of Chile, Department of Economics wp253, University of Chile, Department of Economics.
  5. Andrés Gómez-Lobo Echeñique, 2007. "Affordability of public transport: a methodological clarification," Working Papers, University of Chile, Department of Economics wp261, University of Chile, Department of Economics.

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