NEW DELHI, Jan. 5 -- As private electric bus operators struggle to secure affordable credit, the Centre is working on a new financing scheme that could lower borrowing costs by routing funds through the Small Industries Development Bank of India (SIDBI) and the National Bank for Agriculture and Rural Development (NABARD), according to two government officials aware of the development. The push comes amid heightened lender caution across the electric vehicle (EV) industry over the past year, following the collapse of electric cab company BluSmart. The proposed scheme, being finalized by the ministry of heavy industries and likely to be rolled out over the next six to twelve months, the officials said, seeks to address one of the biggest bottlenecks in India's electric bus transition: the high cost of capital for private operators, who run nearly 90% of the country's two million buses. According to officials, the scheme aims to accelerate the shift from diesel to electric fleets by channelling lower-cost, longer-tenor funds to non-banking finance companies (NBFCs) through SIDBI and NABARD, a move which will reduce EMIs, extend repayment periods, improve margins and risk-adjusted returns for operators. E-buses currently cost two-and-a-half to three times more than diesel-fuelled buses, making financing a critical constraint for adoption, particularly among private operators who dominate intercity and commercial routes. The new scheme is expected to complement existing incentives that have largely focused on government-run city buses. "The government is now looking to provide benefits to private bus operators for procuring more electric buses. While there are about 1-1.5 lakh (100,000-150,000) government buses on Indian roads, the private sector market is much bigger with about 19 lakh (1.9 million) buses covering various intercity routes," said one of the government officials cited above, requesting anonymity. Mint had earlier reported that the central government was developing an incentive framework to improve financing options for electric trucks and buses, as limited access to affordable credit remains a key obstacle to India's green mobility transition. About 4,000 e-buses are sold in India each year, according to data from the government's Vahan registry. As per the latest publicly available annual report of the ministry of road transport and highways (MoRTH) for FY25, around 145,000 buses were operated by 61 state transport utilities. MoRTH's road transport yearbook for FY20 shows that India had about 2.1 million buses at the end of FY20, of which roughly 149,000 were publicly owned, with the remainder operated by private players. The proposed scheme would be the fourth for buses in India's EV space, following incentives for government-run e-buses under the Rs.11,500-crore FAME II, the Rs.10,900-crore PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme, and the Rs.57,613-crore PM-eBus Sewa, under which the government plans to add 10,000 electric buses through a public-private partnership for city operations. Queries emailed to the spokespersons of heavy industries ministry, SIDBI, and NABARD on 2 January remained unanswered till press time....