Urban Development Secretary M Ramachandran said that “one-time financial incentive” will be given to urban public transport. “We had so far not allowed financing of rolling stock but we are making an exception now. We have also recommended that the states bring in certain changes such as imposing additional sales tax on petrol, additional registration fee on four-wheelers and two-wheelers, high registration fee for personal vehicles running on diesel, annual renewal fee on driving licence and vehicle registration, congestion tax, etc. so that there is a shift to public transport,” Ramachandran said.

Under the package, a one-time assistance will be provided for the purchase of buses for urban transport systems till June 30. “The financing is meant exclusively for city bus service and Bus Rapid Transit System (BRTS) for all Mission cities” says the proposal.

To avail of this “Additional Central Assistance”, as the scheme is called, states will have to prepare Detailed Project Reports giving details of city bus service and BRTS systems. The cost of funding the DPRs will also be borne by the Centre and proposals based on a public-private partnership will be given preference.

“In cases where there is no proposed BRTS, at least 20 per cent of the buses procured under JNNURM for million-plus cities should be low-floor buses,” said senior transport officials. The states will have to ensure dedicated bus lanes to avail the funds. They also have to ensure dedicated parking spaces for these corridors and set up a Traffic Management Control Centre for effective monitoring and enforcement of traffic,” he added.

The ministry has recommended introduction of betterment levy on land in areas which benefit by investment in transport projects; rationalisation of parking fee, property development tax, property development on land banks around bus corridors, advertisement revenue on transit corridors, etc. The taxes collected will be used to set up an Urban Transport Fee at state level which would be used for other urban transport projects.