Bus conductor Ramesh Rajput (35) allegedly molested the girl in suburban Juhu on Tuesday afternoon when children were being dropped back home, city Police Commissioner Satyapal Singh said.
Being the last to be dropped home, the KG student was the lone child in the school bus when she was sexually abused by the conductor in the presence of a female attendant, who confronted him for the indecent act, police said.
The case came to light on Wednesday when the victim informed her father about the incident and he reported the matter to the school authorities immediately.
"There was no rape or attempt to rape. We are rectifying our mistake," Singh told PTI.
"Section 376 IPC (rape) was applied in this case by mistake and we are contemplating to remove it with the permission of the court," Mumbai police spokesperson Ambadas Pote said.
A case was registered against Rajput after medical check up of the victim. The accused was arrested and charged with rape and molestation under Protection of Children from Sexual offences Act.
The bus driver's statement has also been recorded, police said.
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