**Executive Summary**
The PM-eBUS SEWA-PAYMENT SECURITY MECHANISM (PSM) SCHEME, notified on 28.10.2024, aims to provide payment security for electric buses. Key progress includes the publication of guidelines, submission of Direct Debit Mandates by 19 States/UTs by 10.12.2025, and the conclusion of tenders for over 6,228 buses as of 28.02.2026. The scheme offers payment security for up to 12 years for deployed buses.
**Key Points / Main Content**
**Scheme Implementation and Progress**
* Scheme guidelines and Standard Operating Procedure (SOP) have been published.
* As of 10.12.2025, 19 States/UTs submitted Direct Debit Mandates (DDM) to the Reserve Bank of India.
* As of 28.02.2026, tenders for 6,228 buses under the PM-eBus Sewa Scheme have been concluded.
* Letters of Award for 4720 buses have been issued by Public Transport Authorities (PTA).
* Tenders for 10,900 buses under the PM E-DRIVE scheme are concluded, with tenders for an additional 2,900 buses in progress.
* Rs. 500 crore was disbursed to Convergence Energy Services Ltd. (CESL) in FY 2025-26 to establish the PSM Fund.
**Bus Allocation and Deployment**
* The document details the state-wise allocation of e-buses across various schemes, including PM-eBus Sewa (MoHUA) and PM E-DRIVE (MHI).
* For Gujarat, 750 buses have been sanctioned under PM-eBus Scheme and LoA issued for 555 buses.
* Total allocated buses across listed states and UTs amount to 23,800, comprising 13,800 under PM E-DRIVE (MHI) and 10,000 under PM-eBus Sewa (MoHUA).
* The typical timeline for bus deployment is two years from the signing of the Concession Agreement (CA) between PTA and the Original Equipment Manufacturer (OEM).
**Role of Central Implementing Agency**
* Convergence Energy Services Ltd. (CESL) serves as the Central Implementing Agency.
* CESL manages the dedicated Payment Security Fund to ensure timely payments to electric bus operators.
* CESL will review and verify payment claims according to Concession Agreements and scheme guidelines.
* CESL is responsible for developing SOPs for fund disbursement and aggregating e-bus operations nationally under the Gross Cost Contract (GCC) model.
**Payment Security**
* The PSM Scheme provides payment security coverage for up to 12 years for each bus deployed.
**Impact Analysis**
**Public Transport Authorities (PTA)**
* **Impact:** PTAs are responsible for issuing Letters of Award for buses and managing the deployment of e-buses.
* **Action Required:** PTAs need to continue issuing Letters of Award and manage the implementation of e-bus schemes in their respective states/UTs.
**Convergence Energy Services Ltd. (CESL)**
* **Impact:** CESL is the Central Implementing Agency and manages the Payment Security Fund, ensuring timely payments and overseeing e-bus operations.
* **Action Required:** CESL must develop SOPs for fund disbursement, review and verify payment claims, and aggregate e-bus operations.
**States/Union Territories (States/UTs)**
* **Impact:** States/UTs participate in the PM-eBus Sewa and PM E-DRIVE schemes, with allocated buses for deployment. They are also required to submit Direct Debit Mandates.
* **Action Required:** States/UTs must ensure the submission of Direct Debit Mandates and facilitate the deployment of allocated e-buses.
**Electric Bus Operators**
* **Impact:** Operators will receive timely payments for services rendered, secured by the PSM Scheme.
* **Action Required:** Operators need to adhere to Concession Agreements and scheme guidelines to ensure payment claims are processed.
**Ministry of Heavy Industries and Ministry of Housing and Urban Affairs (MoHUA)**
* **Impact:** These ministries are overseeing the respective e-bus schemes (PM E-DRIVE and PM-eBus Sewa) and have overseen the disbursement of funds and conclusion of tenders.
* **Action Required:** Continued oversight and support for the implementation of the schemes.
**Reserve Bank of India (RBI)**
* **Impact:** RBI receives and processes Direct Debit Mandates submitted by States/UTs.
* **Action Required:** To process the submitted Direct Debit Mandates from participating States/UTs.
Key Entities Referenced
PM-eBUS SEWA-PAYMENT SECURITY MECHANISM (PSM) SCHEME: The central scheme discussed in the document, focused on providing payment security for electric buses.
PM E-DRIVE Scheme: A related scheme mentioned in conjunction with the PM-eBus Sewa Scheme, indicating a broader initiative.
Convergence Energy Services Ltd. (CESL): The Central Implementing Agency responsible for managing the scheme, the payment security fund, and operational aspects.
Ministry of Heavy Industries: The ministry responsible for the PM E-DRIVE Scheme and the overarching governmental oversight.
Ministry of Housing and Urban Affairs (MoHUA): The ministry responsible for the PM-eBus Sewa Scheme.
Ministry of Heavy Industries
PM-eBUS SEWA-PAYMENT SECURITY
MECHANISM (PSM) SCHEME
Posted On: 10 MAR 2026 4:13PM by PIB Delhi
PM e-Bus Sewa–PSM Scheme was notified on 28.10.2024. The details of implementation progress is as
below:
i. Scheme guidelines and Standard Operating Procedure (SOP) were published.
ii. 19 States/UTs have submitted the Direct Debit Mandate (DDM) to Reserve Bank of India as
on 10.12.2025.
iii. As on 28.02.2026, Tender for 6,228 number of buses were concluded under PM-eBus Sewa
Scheme.
iv. Letter of Award for 4720 buses have been issued by Public Transport Authorities (PTA).
v. Tender for 10,900 buses under PM E-DRIVE scheme are concluded and tender for 2,900
buses is under progress.
vi. Rs. 500 crore has been disbursed to Convergence Energy Services Ltd. (CESL) to set up the
PSM Fund in FY 2025-26.
In the state of Gujarat, 750 buses have been sanctioned under PM-eBus Scheme and Letter of Award
(LoA) for 555 numbers of buses have been issued by PTA. The State wise details of the allocated e-buses
are as below:-
S. No. State/UT No of buses
PM E-DRIVE PM-eBus Sewa Total
(MHI) (MoHUA)
1 Gujarat 1,800 750 2,550
2 Karnataka 4,500 750 5,250
3 Maharashtra 2,500 1,609 4,109
4 Telangana 2,200 151 2,351
5 Delhi 2,800 - 2,800
6 Andhra Pradesh - 1,050 1,0507 Madhya Pradesh - 972 972
8 Meghalaya - 55 55
9 Odisha - 400 400
10 Punjab - 447 447
11 Puducherry - 75 75
12 Rajasthan - 1,150 1,150
13 J&K - 200 200
14 Assam - 100 100
15 Uttarakhand - 137 137
16 Manipur - 50 50
17 Arunachal Pradesh - 50 50
18 Goa - 50 50
19 Haryana - 450 450
20 Bihar - 400 400
21 Chhattisgarh - 240 240
22 Kerala - 293 293
23 Himachal Pradesh - 50 50
24 Dadra and Nagar Haveli and - 50 50
Daman and Diu
25 Chandigarh - 428 428
26 Ladakh - 48 48
27 Andaman & Nicobar Islands - 45 45
Total 13,800 10,000 23,800Convergence Energy Services Ltd. (CESL) acts as the Central Implementing Agency for Scheme,
managing the dedicated Payment Security Fund to ensure timely payments to electric bus operators. CESL
will review and verifies payment claims in accordance with the Concession Agreements (CA) and scheme
guidelines. CESL is also responsible for developing the SOPs for fund disbursement and for aggregating
e-bus operations at the national level under the Gross Cost Contract (GCC) model.
PSM Scheme provides payment security coverage for a period of up to 12 years for each bus deployed
under the Scheme. Usually, timeline for deployment of buses is considered to be two (2) years from
signing of CA between PTA and OEM.
As of 02.03.2026, 19 State/UTs have submitted the Direct Debit Mandate (DDM) to the Reserve Bank of
India (RBI) who have either participated under PM E-DRIVE Scheme of Ministry of Heavy Industries or
PM-eBus Sewa Scheme of Ministry of Housing and Urban Affairs (MoHUA).
This information was given by the Minister of State for Heavy Industries, Shri Bhupathiraju Srinivasa
Varma in a written reply in the Lok Sabha.
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