GPS Based Bus tracking System is an Application that has its client side on the Android platform. Application is free of cost and easy to install on device. The accuracy of this system relies on the GPS coordinates generated using satellites while reliability of the system depends on the GPRS facility. The system is effective where Internet is accessible. By including the concept of direction, the size of the database has reduced to half, thereby not exhausting the server and database with similar sets of data in different tables. The proposed system also predicts the average velocity of the bus using clustering and back propagation method. This increases the accuracy of the system as it also takes into account the traffic conditions during that day of week and time of the day.