Table of Contents
Urban Studies Research
Volume 2012, Article ID 865972, 7 pages
http://dx.doi.org/10.1155/2012/865972
Research Article

Public Transport Subsidies and Affordability in Mumbai, India

1University of Maryland, College Park, MD 20742, USA
2Resources for the Future, Washington, DC 20036, USA

Received 24 March 2012; Revised 22 July 2012; Accepted 4 September 2012

Academic Editor: David Wong

Copyright © 2012 Maureen Cropper and Soma Bhattacharya. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This paper describes the role of public transport and incidence of transport subsidies in Mumbai, India, where public transport is used for over 75% of all motorized trips. On average, expenditure on public transit constitutes a larger share of income for the poor than for the middle class. However, a larger fraction of transit users are middle class. In terms of incidence, the poorest 27% of the population receives only 19% of bus subsidies and 15.5% of rail subsidies. One-quarter of these households do not use rail, and 10% do not use bus, implying that they receive no transit subsidies. Improving the welfare of the poor through demand-side subsidies or cash transfer is, however, difficult. We therefore examine the optimal level of transit subsidies, based solely on distributional considerations.