Eight states in India are currently offering free bus travel for women—Delhi, Punjab, Tamil Nadu, Karnataka, Telangana, Andhra Pradesh, Jammu & Kashmir, and Kerala.
Of all the government-offered freebies, free bus rides for women are often hailed as the most logical and progressive. Progressive because, if India is to achieve Viksit status by 2047, we need more women to enter the workforce and become financially independent. Currently, more than 92 per cent of Indian women participate in unpaid domestic work. This means they are working every day, but not for activities that generate an income.
If we look at current investor demographics, only 1 in 4 investors is a woman, which means only 3 to 3.5 crore women in India actively invest. The reason why we have very few women investors could be that they have little to no disposable income. When it comes to family expenses such as food and groceries, stationery, and kids’ education, they empty their purses without hesitation.
So, at one end we have women working but not getting paid, and on the other end we have women who have to spend to keep their family up and running. This dual blow is depriving them of the path to financial independence.
The change we need to see is by encouraging more women to enter the formal workforce. Help them earn. The job they seek may not always be within walking distance of their home. They might have to rely on a transport service to reach their workplace, and this cost could affect their net savings.
On average, a person spends between ₹1,000 and ₹4,000 on transportation to get to their workplace. Due to rising fuel costs, these expenses are likely to increase year on year.
This is where a simple freebie like free travel for women can make a big difference. Let us assume the cost savings are on the lower end, at ₹1,000 per month. If we use the SIP calculator from Mutual Funds Sahi Hai, investing ₹1,000 per month for a 25-year period amounts to ₹18.98 lakh ~ ₹19 lakh in household savings.
The important takeaway is that even a small contribution of ₹1000 per month can build wealth over a long time. The tenure is set at 25 years because that is the average number of years a person remains employed.
Steps to make this plan work
Before availing the free ticket option, travel to your workplace by private transport. Calculate the exact cost that you would incur if you were not using the free bus plan.
- Log this cost in your personal diary. Example: Travel expenses = ₹1,540 per month.
- Match this value and set an SIP on the Nifty50 Index Fund at ₹1,540 per month.
- Use the SIP calculator to check how much value a ₹1,540 SIP would create over 25 years. In this instance, it works out to be ₹29.22 lakh.
The important takeaway is that you are saving ₹1,540 per month on travel expenses and ensuring it is invested somewhere so you are not forced to spend it.
Over time, these small contributions add up to a huge corpus due to the power of compounding. On the other hand, if you just see the free bus ticket as just a freebie, you miss out on the opportunity costs.
Do not worry that investing ₹1,540 per month is too low. It is much better than not investing at all. When you get promoted or receive a higher salary, you can think of increasing the monthly savings rate.
The writer is a SEBI Registered Investment Adviser (INA000021757), SEBI Registered Research Analyst (INH000025045), and author of ‘How to join the top 1% options traders club’.
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The opinions expressed in this article are those of the author and do not purport to reflect the opinions or views of THE WEEK.
