The Central Government would encourage high capacity public transport systems being set up through the mechanism of Special Purpose Vehicles (SPV) and would offer financial support either in the form of equity or one time viability gap financing, subject to a ceiling of 20% of the capital cost of the project, after evaluating various parameters such as:

The basic principle in financing such public transport systems would be that the government should provide the infrastructure but the users (direct and indirect beneficiaries within the city) must pay for the operating costs and the rolling stock.

The Central government's capital support would take the form of equity participation or one time viability gap funding and would be subject to a ceiling of 20% of the capital cost of the project. Preference will be given to those who are able to demonstrate additional resources for the project through dedicated taxes and innovative financing methods.

Para transit is normally expected to fulfill a need that neither public transport or personal vehicles are able to fulfill. They normally cater to a category of occasional trips such as trips to airports or rail stations with excessive baggage, or emergency trips that have to be undertaken immediately and it is not possible to wait for public transport. Para transit would not normally be used for regular commute trips to work or school. However, when the quality of public transport deteriorates, para-transit tends to substitute for public transport. Unfortunately, this has started happening in many Indian cities. As such, this policy would seek to restore para-transit to its normal role by persuading the improvement of public transport.