The transport department has decided to once again seek the government's approval to introduce a private bus services run by corporates in the Capital.
As a pilot project, the department wants to allow any private bus operator to run 231 buses on pre-defined 32 routes.
The department is expected to raise the proposal in the next meeting of the Delhi cabinet.
In July this year, the cabinet had deferred the proposal citing lack of funds to give a cash subsidy of Rs 85 crore per annum to each bus cluster.
The transport department has divided 657 bus routes in the capital into 17 clusters where corporates are expected to run 4,400 buses.
With the government's plan to phase out the inefficient Blueline buses before the 2010 Commonwealth Games, the corporate-run bus clusters is expected to help in providing better public transport.
According to the proposal, the government will have to pay Rs 47.42 per kilometre per bus to the private player.
The revenue from ticket sales, which works out to about Rs 20 per kilometre from each bus, will go to the government.
With the increase in fares, senior transport department officials said the earnings from ticket sales would go up anything between 50 and 70 per cent.
For 4,400 corporate-run buses on 657 routes, the government will have to pay about Rs 1,670 crore per annum - something the cash-strapped government was against.
"The cabinet feels the government is already spending about Rs 2,000 crore to procure low-floor buses. If the transport department wants to have private players to run a parallel bus service in Delhi, it should be on a 'no profit no loss' basis," a government official said.
But transport department officials believe earnings through ticket sales after the fare hike will touch almost Rs 1,250 crore per annum and the government will have to pay only Rs 420 crore per annum for 4,400 buses.
"We hope to bridge this deficit of Rs 420 crore through advertising in buses," a senior transport department official said requesting anonymity.