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One among those injured is critical, while others have sustained minor injuries and are being treated at the hospital, they said.
The incident occurred when the bus was proceeding from Chikkamagaluru to the city with about 27 passengers.
People claiming to be eyewitnesses said they noticed the fire when the bus was moving and informed the driver.
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Fire engines were called in to douse the fire, and a case has been registered.
Senior Karnataka State Road Transport Corporation officials said exact cause of fire is yet to be ascertained, and forensic report will make things clear.
Managing Director of KSRTC, Rajendra Kumar Kataria said a thorough investigation will be conducted to ascertain the cause for the accident and those responsible will have to face action.
He also said the kin of the dead will be compensated with Rs 3 lakh immediately and medical expenses of those injured will be taken care of.