Vettri Payanam Thittam: what is the economic mileage of a no-fare bus ride?

The scheme is expected to cost an additional ₹1,600 crore a year and a total of ₹6,000 crore. The initiative, launched on Gandhi Jayanti, is an extension of the existing women’s zero-fare bus scheme, Vidiyal Payanam

Updated - October 11, 2026 11:13 pm IST - Chennai

The State government expects around 84 lakh women to benefit from the Vettri Payanam Thittam every day. | Photo Credit: E. LAKSHMI NARAYANAN

Tamil Nadu government’s expanded Vettri Payanam Thittam (VPT) — the no-fare bus travel for women — which alone is expected to cost an additional ₹1,600 crore a year and a total of ₹6,000 crore, has brought to focus the social return on investment (SROI) versus fiscal cost.

Chief Minister C. Joseph Vijay seems to have mastered the art of welfare politics by including the gratis within the State’s about ₹4-lakh-crore revenue spending framework.

However, the question is can the government convert the estimated 84 lakh daily journeys into measurable gains in employment of women, productivity, household income, and mobility?

Tamil Nadu’s Gross State Domestic Product (GSDP), estimated at ₹40.67 lakh crore for 2026-27, is large enough to accommodate VPT; even as its outstanding liabilities are projected at about 27% of GSDP in 2026-27. Debt servicing is about ₹1.28 lakh crore or 37% of the estimated revenue receipts.

The latest initiative, launched on Gandhi Jayanti, is an extension of the existing women’s zero-fare bus scheme, Vidiyal Payanam, covering a wider range of public transport buses. The government expects around 84 lakh women to benefit every day.

Tamil Nadu’s 2025-26 Budget allocated as much as ₹3,600 crore as subsidy for Vidiyal Payanam (started by previous DMK regime), alongside ₹1,782 crore for concessional student fares and ₹1,857 crore as diesel subsidy.

The expanded VPT is about 1.7% of revenue receipts and 0.15% of GSDP in isolation, but the concern is the State’s budgeted ₹55,775-crore revenue deficit, meaning current revenues are insufficient to meet the current expenditure. There is no longer a specific Finance Commission cushion for States whose revenue expenditure exceeds revenue receipts.

The recurring burden of the scheme, which may appear to be small in terms of GSDP, is that it is not targeted, which means part of the subsidy goes to those who may not need any assistance.

The higher the ridership, the larger will be the reimbursement needs. To ensure sustainability, the State should have a clear formula linking the reimbursement to actual passenger journeys and route costs. Otherwise, it may put pressure on transport funding.

If reimbursement does not fully compensate Tamil Nadu’s State Transport Undertakings (STUs), it would further weaken the financial metrics of them, which has been incurring daily average losses of ₹19 crore.

The existing arrangement is that the State compensates transport undertakings for zero-fare journeys. The Comptroller and Auditor General (CAG) reported that the government reimbursed the Metropolitan Transport Corporation (MTC) at ₹16 per zero-value ticket, implying revenue loss is effectively shifted from the transport corporations to the State Budget.

A yearly ₹6,000-crore commitment is not a one-off theatrics, rather the State government has to transparently quantify the benefits of unstringed subsidy to show mobility efficiency, labour market efficiency, income generation efficiency, cost-benefit ratio, and long-term sustainability (at the end of current term of the TVK).

The ultimate fare for its success is measurable SROI, not the electoral mileage.

Published - October 11, 2026 11:12 pm IST

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