When it showcased Circuit 10 months ago, Ashok Leyland said it was “designed and engineered entirely in India, by Indians, for the nation”. The ground reality seems to be different, though, as cash-strapped state transport undertakings (STU) baulk at adding costly green vehicles to their fleets.

The Hinduja Group flagship is not alone. Tata Motors Ltd and Volvo Buses India Pvt. Ltd too have bumped up against the same hurdle for their hybrid and electric offerings and haven’t moved beyond pilots and test runs.

“I am not complaining—but there’s a gap between strategy, policy and action,” said T. Venkataraman, senior vice-president, global buses at Chennai-based Ashok Leyland. “We have been in dialogues with state transport undertakings, but haven’t received any order so far,” he added.

The gestation period for any new project is at least 24 months and requires a lot of investment, he said, emphasizing on the need for better engagement between policymakers and manufacturers.

Bus makers are also concerned about the government discouraging hybrid vehicles with high taxes, though these vehicles could have been the natural, logical progression in the clean technology journey.

While electric vehicles attract a goods and services tax (GST) rate of 12%, hybrid vehicles attract a rate of 28% plus cess.

At an event in Mumbai on 29 July, Nitin Gadkari, Union minister for road transport and highways, said as part of the government’s resolve to encourage sustainable, cost-effective public transport, it would offer all the support required for buses than can run on non-fossil fuels such as ethanol, biofuel and electricity. However, officials at bus makers and STUs differ.

“Most of the STUs in the country are cash-strapped. Some are even struggling to pay salaries to their staff. Buying new buses, that too those that run on alternative technologies and cost three times more than regular buses, is out of the question,” said an official at an STU who declined to be identified.

Manufacturers are also concerned about the government preferring electric buses over hybrids. “What are we worried about—cleaning the country or the city?” asked Sandeep Kumar, head-sales and marketing for the passenger commercial vehicle business unit at Tata Motors, pointing out that with most of the electricity generation in the country being coal-based, a pure electric bus doesn’t help the larger goal of reducing the carbon footprint. On the contrary, he says, hybrid buses are at least 30% cleaner and don’t require creation of expensive infrastructure.

Tata Motors has been in talks with STUs across India including Mumbai Metropolitan Region Development Authority (MMRDA)-BEST (Mumbai), Bangalore Metropolitan Transport Corporation, Karnataka State Road Transport Corporation, Kerala State Road Transport Corporation, Delhi Transport Corporation, Himachal Road Transport Corporation, Chandigarh Transport Undertaking, and Andhra Pradesh State Road Transport Corporation for the introduction of hybrid buses. Last year, it won a contract to supply 25 hybrid buses to the MMRDA – the single largest order for hybrid buses in India.

Volvo Buses supplied two hybrid buses to Navi Mumbai Municipal Corporation last year. After the hike in tax rates, the interest has cooled off, said V.R.V. Sriprasad, managing director, South Asia at the Swedish vehicle maker. “There’s an intent; we are waiting for steps which facilitate it,” said Sriprasad, adding that Volvo has no plans to introduce an electric bus in India anytime soon.

In the event, even as bus makers are ready with all kinds of alternative fuel technologies— be it liquefied natural gas, electric, ethanol or bio-compressed natural gas— it will be some years before they go beyond the trial runs and pilots.

With close to 1.7 million buses sold every year, India is the second largest bus market in the world after China, but a creaky public transport system, growing congestion and a high number of road fatalities pose big challenges. Over the years, flagship schemes like Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and Atal Mission for Rejuvenation and Urban Transformation (AMRUT) have brought the need for clean and efficient public transportation centre stage, but there’s still a long way to go, say experts.

V.G. Ramakrishnan, founding partner and managing director at Avanteum Advisors LLP, a consulting firm, says unless the government funds bus purchases, it’s impossible for STUs to buy electric or hybrid buses. For the cost of one such bus, an STU can buy 15 regular buses. “The STUs don’t even have the capability to change tyres, let alone buy an electric bus. Of the 68 STUs, only three to four are making money, the rest are bleeding,” he said.