The driver damaged some 40 vehicles before police brought the bus to a halt after 30 minutes and arrested him.
The driver, named as Santosh Maruti Mane, "went berserk" on a 25km (17 mile) rampage during the morning rush hour, police said.
Police are questioning the 30-year-old driver to try to determine a motive.
Mane, who is a driver with the government-run state transport department, arrived at a bus depot early on Wednesday and drove off with an empty bus, police said.
Eyewitnesses said he drove the vehicle at a very high speed and on the wrong side of the road through busy areas, running over pedestrians and smashing into vehicles.
Police opened fire at the bus to try to bring it to a halt.
TV pictures showed smashed cars and auto-rickshaws that had been hit by the bus.
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