Karnataka: Rs 1,800 cr Shakti scheme reimbursement pending; transport corporations in red

The state government owes its four road transport corporations (RTCs) nearly Rs 1,800 crore for the women’s free bus travel scheme, Shakti, according to the latest data obtained by DH.

Bengaluru: The Karnataka government owes its four road transport corporations (RTCs) nearly Rs 1,800 crore for the women’s free bus travel scheme, Shakti, according to the latest data obtained by DH.

The dues include Rs 1,180.62 crore for 2023-24 and Rs 579.19 crore for the current fiscal year up to November.

Launched on June 11, 2023, the scheme has been a runaway hit, reaching a new milestone of 350 crore beneficiaries on Sunday.

The delay in reimbursement for the flagship guarantee, along with the failure to hike bus fares, has been cited for the RTCs’ “precarious” financial condition.

RTC staff have announced an indefinite strike from December 31, demanding a pay hike and arrears for 38 months.

Two sticking points seem to be holding up full payments under the scheme. While the government releases funds based on budgetary allocations, it expects the RTCs to claim reimbursement only according to incremental expenditure.

The scheme’s popularity has increased the RTCs’ average daily ridership from 85 lakh to 1.16 crore.

RTCs are making more trips and carrying more passengers without incurring additional costs on diesel and other overheads.

Consequently, the government has asked them to claim only incremental expenditure, for which a formula has to be worked out, a high-ranking government official explained.

Second, the government gives RTCs tax breaks for new vehicles. It spent Rs 580 crore in 2023-24 and will pay Rs 500-600 crore this fiscal year. These tax breaks should also be considered as part of the scheme’s cost, the official added.

The official, speaking on the condition of anonymity, asserted that there weren’t many dues.

“We have allocated Rs 5,800 crore in this year’s budget and are releasing payments monthly. The RTCs have been informed that they will be reimbursed according to the budget. There may be some differences, which have to be reconciled,” the official told DH. 

The introduction of smart cards for the beneficiaries is expected to weed out leakages and bring clarity on expenditure, the official added. 

The government finances the Shakti scheme from three sources: general fund (financial assistance), Scheduled Caste Sub Plan and the Scheduled Tribe Sub Plan. 

A well-placed source in an RTC, also speaking anonymously, said the current budgetary allocation was insufficient to fully cover the Shakti scheme expenditure.

“We requested more funds from the government but have been asked to wait until the next budget,” the source added. 

The RTCs also argue that vehicle tax breaks should not be clubbed with the Shakti scheme because bus fares haven’t been hiked for years.