States may lose power to fix fares

State governments may lose the power to fix the fare of buses run by state road transport corporations if the Centre accepts the recommendations of a high-level committee.

As per the recommendations made by a committee headed by former IIT-Delhi professor A L Agarwal, constituted to make suggestions to improve the health of state road corporations, the power to fix the fares should be given to road transport corporations instead of state governments. At present, bus fares are fixed by the state governments mostly after taking decision in the cabinet.

The Union ministry of road transport and highways had constituted the committee to make recommendations to review the Road Transport Corporation (RTC) Act, 1950, to ensure that road transport corporations provided quality and effective services. The committee submitted its report to the ministry and the latter has called for opinions from the state governments.

The committee also recommended that the power should be given to corporations to raise loans without prior consent of state governments in cases where the banker or financial institutions agree to sanction loans to the corporations without guarantee from the government.

On social obligatory services like concession passes to students, senior citizens or ex-serviceman, the expenditure towards such services should be borne by the state government, said the committee in the report. The panel also said if the corporation created any subsidiaries, it should be concentrated on the primary objective of providing road transport services.  

Huge losses

With more and more public transport corporations incurring huge losses due to too much political interference in fixing fares and ineffective management, the ministry of road transport wanted to liberate them from the clutches of politicians and make them more independent.

The Centre is keen to improve the public transport system as it would be advantageous, both in terms of economic as well environmental factors.  Compared to a bus, a car consumes nearly six times more energy while two-wheelers consume about 2.5 times, an official in the ministrysaid. After taking the states’ views, the ministry will place them before Parliament for its approval for the amendment to the existing RTC Act.