Vettri Payanam Thittam: what is the economical bus travel distance without fare?

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

The Tamil Nadu government’s expanded Vettri Payanam Thittam (VPT) – free bus travel for women – which alone is expected to cost an additional ₹ 1,600 crore annually and a total of ₹ 6,000 crore, has brought a focus on social return on investment (SROI) over fiscal cost.

Chief Minister C. Joseph Vijay seems to have mastered the art of social policy by including around ₹4 lakh crore for free in the state expenditure framework.

But the question is, can the government translate the estimated 84 million daily journeys into measurable gains in women’s employment, 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 the VPT; although its outstanding liabilities are estimated to be around 27% of GDP in 2026-27. Debt service is about ₹1.28 crore or 37% of estimated revenue.

The latest initiative launched on Gandhi Jayanti is an expansion of the existing zero-fare bus system for women, Vidiyal Payanam, to cover a wider range of public transport buses. The government expects around 84 million women to benefit every day.

Costs to the cash register

The Tamil Nadu Budget 2025–26 allocated up to ₹3,600 crore as subsidy for Vidiyal Payanam (started by the previous DMK regime), along with ₹1,782 crore for concessional student fares and ₹1,857 crore as diesel subsidy.

The expanded VPT is about 1.7% of revenue and 0.15% of GSDP in isolation, but the problem is the state’s budgeted revenue deficit of ₹ 55,775 crore, which means current revenue is insufficient to cover current expenditure. There is no longer a special finance commission cushion for states whose revenue expenditure exceeds revenue.

Growing concern

A recurring burden on the system, which may seem small in terms of GSDP, is that it is not targeted, meaning that part of the subsidy goes to those who do not need any help.

The higher the number of passengers, the greater the need for reimbursement. To ensure sustainability, the state should have a clear formula linking reimbursement to actual passenger journeys and route costs. Otherwise, it may put pressure on transport funding.

If the compensation does not fully compensate the Tamil Nadu State Transport Undertakings (STUs), it would further weaken their financial performance, which has been suffering an average loss of ₹19 crore daily.

The current arrangement consists in the fact that the state compensates transport companies for journeys with a zero tariff. The Comptroller and Auditor General (CAG) said the government reimbursed the Metropolitan Transport Corporation (MTC) to the tune of ₹16 per zero-value ticket, effectively shifting the revenue loss from the transport companies to the state budget.

The annual commitment of ₹6,000 crore is not a one-time show, rather the state government must transparently quantify the benefits of the untied subsidy to demonstrate mobility efficiency, labor market efficiency, income generation efficiency, cost-benefit ratio and long-term sustainability (at the end of the current TVK tenure).

The ultimate tariff for its success is measurable SROI, not mileage.

Published – 11 Oct 2026 23:12 IST