Transportation infrastructure has long been recognized as the sine qua non of rapid economic development. As a predominantly agrarian economy with a vast and growing population spread over an extensive mass of land, India presents a veritable case of this truism, sadly by the lack of it. Notwithstanding the vagaries of development in other sectors, the transport sector in India, ironically, has received scant attention over five decades of the planning era, which has lent itself to lop-sided development in favour of the railways. Though deregulation and attendant economic reforms have augmented transport services by air and road in the last decade, the inadequacy of transport infrastructure and the acute paucity of resources to fulfil the provision of the same have been the bane of problems confronting the government. Privatization as a solution to circumvent resource constraints has raised new issues of social and environmental equity, which transcends the immediate concerns of infrastructure development. As is evident, though the solutions to the problems of the transport sector are multifarious, they emphasize the imperative need for rational and integrated transport planning and policy. A cursory look at the problems plaguing this sector also reveals that the issues and concerns cannot be dealt with in its entirety. Against this background, we confine ourselves to the study of the passenger transport sector and attempt to address an interesting and increasingly apparent phenomenon of travel behaviour, namely intermodal choice and modal substitution. The genesis of this study was an earlier work done by a research team at the Centre for Mathematical Modelling and Computer Simulation (C-MMACS), NAL, where in, a general methodology to describe the growth of the transport sector in India was developed in terms of appropriate mathematical models. Significantly most of the variables describing demand, supply and performance were found to trend exponentially. However, the models failed to reflect the trends in intermodal substitution and its significance in evaluating future transport demand. For example, the development or availability of alternative means like rail or personalized vehicles may influence the demand for bus transport. Similarly demand for air transport may be a function of comparative advantages presented by alternatives like upper class rail travel. This phenomenon is observed to be pronounced on short-haul routes characterizing inter-city travel, where such modes are extremely competitive. We consider a regional network of high-density routes in southern India, as a representation of several such transport networks across the country, to study this phenomenon and its implications for future policy. The primary objective of this study is to develop and evaluate a set of econometric models that would adequately measure the extent of intermodal substitution in passenger transport on short-haul routes (inter-city travel) and, critically evaluate the factors that affect travel choice in a multimodal environment. Toward this, the study is divided into three parts. Part one focuses on understanding broad trends in air, rail and road travel, for the routes in consideration. Suitable regressions are estimated to measure the effect of critical transport variables on route-wise travel demand. The coefficients are estimated separately for two categories of travel - First Class and Second Class. Part two of the study is based on data collected from individual travel surveys on the route network. A simplified questionnaire was used for this purpose. We use the traditional logit framework to estimate choice probabilities based on user perceptions about factors affecting their choices. As in the previous case, we estimate the logits for both classes of travel, viz. First Class and Second Class, under the equal substitutability assumption. We also estimate the logits for the general case for the sake of comparison, though not practicable. Part three involves a case-study of an alternative high-speed rail link for one of the routes in the network having the highest traffic density, to illustrate its effect on travel choice in a multimodal transport network. We also demonstrate the feasibility of the project using a benefit-cost approach. From the results, it is observed that substitution is predominantly from air to rail for "first-class" travel, and from rail to road for "second-class" travel. Besides, it is also observed that travel choice is largely influenced by non-price (fare) considerations. The value of travel time is estimated for both categories of travel, using the trade-off method and is found to be significantly different. All regressions show a high and the coefficients are significant at the 5% level. The logit analysis validates the earlier conclusion that non-price (fare) factors influence the demand for different modes. It is found that users attach considerable importance to comfort and convenience, including time of travel, while making travel choices. It is also observed that the logits vary significantly when factors are grouped, and further, between categories of travel In the case of the high-speed link, we estimate that there will be a significant shift in travel demand from air to rail and also from road to rail, given substantial travel time savings. The estimates of passenger revenue and decongestion benefits also provide a strong rationale for the implementation of the project. Sources of data include published and unpublished records of Indian Airlines, Indian Railways and State Road Transport Undertakings (SRTUs) on air, rail and road travel respectively. Data on population and other macroeconomic variables were obtained from census records and similar statistical publications. An important feature of this study is its attempt to bridge the macro and micro policy environments. It is one of the first attempts to study the dynamics of travel demand and choice behaviour in a multimodal regional transport network in India. Unlike previous studies, it transcends the realm of urban transport economics and extends its scope to the study of regional transport characteristics, where inter-city passenger travel has undergone significant changes both in environment and behaviour in the last decade. The entire study has been conceptualized in a system dynamics framework to describe its relevance to overall transport planning. It is believed that such an exercise would be a precursor for the development of a full-fledged macroeconomic model of the transport sector in India.