How to fund Shakti

The Shakti scheme assuring zero-cost bus rides to women has shifted the conversation from managing traffic and congestion to enabling mobility. 

The ridership breaching the one crore mark reveals pent-up demand, and is evidence that mass mobility, or lack thereof, is the real issue. Traffic automatically begins to behave when people shift from the congesting private modes to shared public transport.

Also Read | Shakti scheme: More women travel in govt buses

Mobility is a key socio-economic marker, and like poverty and wealth, it is gendered. Socially, women’s mobility is restricted by hour of day, length of commute, and safety. Even cities impose differential hostel hours for
adult women, a camouflage for restricted mobility.  That economics
drives women’s mobility is apparent in the rise in bus patronage due to the Shakti scheme. 

This matters not just to individuals but to the state as a whole because economic growth is an outcome of increased mobility. Whether women go to educate themselves, for better jobs, or to temples, expenses and consumption follow. A nice side effect of women’s mass mobility is that it renders public transport safer, a feat beyond the pale of mere technology.

Four pieces of data showed the need for the Shakti scheme.

Karnataka’s undergraduate college female Gross Enrolment Ratio is only 32 per cent. Two-thirds of school-educated women do not enrol in college. Neighbouring Tamil Nadu, with free travel for all women, is at 51 per cent.

Second, the female labour force participation rate is 25.1 per cent. Only a quarter of women over 15 years work in the formal sector. The other 75 per cent are employed as casual, below-minimum wage labour, or in unpaid household and childcare work.

Third, the average wage gap is 33 per cent between men and women. Lower pay limits spare cash they can deploy for career advancement.

Fourth, daily ridership having swelled by 23 per cent across RTCs, it is apparent that the state GDP is a poor
reflection of people’s actual income
and affordability.  

Free public transport is no silver bullet, but it does decimate a reason used to deny female aspirations by enabling safe, affordable journeys. Therefore, its characterisation as a freebie is ill-informed. Leaving aside ideological considerations, this progressive policy could deliver benefits across social, economic and gender realms, if sustained for an expansive set of beneficiaries. 

The population unaddressed by this scheme also stand to benefit! Each bus holding at least 70 passengers avoids about 70 bikes or 50 cars or 25 other shared vehicles on the road. Outcomes stretch beyond the economic to clean air, reduced congestion, better public health, and reduced carbon footprint.  

However, its fiscal viability is a vexed problem, worldwide.

For the Shakti scheme, funding needs to account for the zero-ticket costs, purchase of thousands of buses for both residual and new demand, and operational costs. Post-GST, only fuel, road use, property and liquor taxes are exclusively in the states’ kitties.

States abroad partly fund public transport by charging stiffly for industrial emissions and levying punitive cess on private transport. While all these levers must be considered seriously, there is a dire need for out-of-the-box thinking, without which there is real risk of policy failure, and consequent political collateral. 

This scheme, in enabling mass public transit adoption by a large population, ticks a lot of boxes for private funding. Lower carbon footprint, lower pollution and congestion, and cleaner air, leading to better public health
outcomes, and additionally, reduced gender disparities.  

Private domestic funding needs for green initiatives, as per Climate Policy Initiative, is Rs 1.5 lakh crore in India. Clean transport gets Rs 10,000 crore FDI and philanthropic private funding. The Indian transport sector already uses foreign and private funding heavily, from Japanese investments to public-private partnerships via domestic infrastructure conglomerates.

Reuters reports that India received $20.4 billion worth of pledges from developed nations to fight climate change. Meanwhile, gender equity domestic funding is at $150 million annual run rate, as per OECD.

These funds have so far been garnered by various NGOs, whose peripheral experiments barely scratch the surface compared to the scale of impact the State is able to deliver.

The Transport Ministry should set up a Section 8 entity to stake claim to green, climate change, social welfare, gender equity, and public health finance from private domestic as well as foreign funders.

A Section 8 entity could sponsor sustainability and welfare experiments of the ministry while run-rate expenses like the purchase of diesel buses, operational costs, etc., will have to be borne by the exchequer. It can defray a 3 to 5-year ramp for trials like subsidies for BPL beneficiaries, bus passes for female students, clean energy buses, fare reductions for socio-economically oppressed and the differentially abled, accessibility, and safety features, etc.  

This option is not without its challenges. Government, in general, has a serious trust deficit with private funders, the chief concerns being whether the funds will be utilised efficiently and for advertised purposes, given pilferage, opacity and low accountability. Funding is also often geographically disaggregated -- backward districts, urban transport, etc. 

These can be mitigated. The Section 8 entity could have city-specific units with credible board members drawn from distinguished civil society members to bridge the trust-gap and attract donors. This would not only increase the trust quotient with donors, it would invest new, local, privileged stakeholders in the success of public transport. For instance, Bengaluru’s super-rich and the corporate sector can fund BMTC’s experiments, Davangere
can seek out its local philanthropists, and so on.

In addition, for improved accountability, the ministry could restructure its policies and expenses into two buckets -- publicly funded and Section 8 funded. The latter needs pitches, audit reports, account statements, etc., submitted to donors regularly, and this will foist vision, planning, auditing and accountability upon the ministry.

So, the Section 8 company could become the transport ministry’s vehicle for funding trials in their initial phases. It can deliver grants for 3-5 years to the ministry for its novel programmes, not steady-state expenses, a relief the State could use to shore up public resourcing. The advantage is that such grants come without fiscal penalties or compromises to the commons and public assets, unlike the PPP model.

This poll guarantee of free bus rides for women could usher in a paradigm shift in mobility, modal share, climate change and gender equity in Karnataka. It has led to large-scale adoption of public buses, centred media spotlight on mobility and, if sustained, could yield better human-development and GDP outcomes. Sustaining universal, low-cost, accessible public transport calls for experimenting with innovative funding solutions. Opening the Section 8 door would expand public weal sources beyond public finance and PPP to private funding. This could be a road to better transport governance and set a historic precedent.

(The writer is co-founder, Political Shakti & Citizens for Bengaluru)