The new scheme is likely to be called 'Pradhan Mantri Gram Parivahan Yojana' and launched on August 15. It will be on the lines of the ongoing rural roads scheme, 'Pradhan Mantri Gram Sadak Yojana'.
"The scheme will be a revolutionary move as it will not only revamp the public transport system in rural areas but will also generate enough employment options, especially for women," Union Rural Development Minister Narendra Singh Tomar told PTI.
Roads have already been constructed in these areas, so by providing more and easily available modes of public transport, the government wants to bridge the gap between villages and cities, Tomar added.
To begin with, it will be implemented in 250 blocks across the country and the Centre will provide interest-free loan on at least 1,500 commercial vehicles with a seating capacity of 10 each, according to sources in the ministry.
There will be a ceiling of Rs 6 lakh on the loan amount and the repayment period will be of about six months, they added.
To study the feasibility of the scheme, a survey was carried out in rural areas of Bilaspur in Chhattisgarh.
As per its findings, it would be remunerative to provide 10-12 seater commercial vehicles at subsidised rates on a stretch of 20-22 km which connects at least 10-14 small villages, the sources added.
According to the 2011 Census, about 33 per cent of Indians still travel on foot and do not use motorised transport, and the majority of the remaining populace either use two-wheelers or any other unsafe mode of transport.