Karnataka govt's free bus pass schemes hurting RTCs

It is not the low fare, but the government’s free pass scheme that has contributed a major part to the financial crisis of the state road transport corporations (RTC), including BMTC and KSRTC.

The government owes Rs 1,080 crore to the four corporations.

Over the past year, the RTCs have sought an increase in travel fare ranging from 14.5% to 18% stating that rising operational costs were adding to their losses. They have argued that the fares have remained low in the face of rising fuel costs and employee salaries.

Activists have urged the government to extend financial assistance to reimburse such losses rather than transferring the burden to passengers.

The government has been announcing free bus passes to new sets of beneficiaries as a popular measure in the Budget. Even as it takes credit for the measure, the government has made it a norm to provide less than it owes to the RTCs as reimbursements for expenditure on such schemes. As a result, the accumulated losses from passes has soared to Rs 1,080 crore in the past five years.

Sources in the government said the Karnataka State Road Transport Corporation (KSRTC) and Bangalore Metropolitan Transport Corporation (BMTC) were the biggest losers of this delay.

Rs 200 cr shortfall

“Typically, the government allocates lower funds for the schemes than incurred. The corporations have to write to the transport department, which then seeks fund from the finance department. For the past five years, an average of Rs 200 crore shortfall has continued, leading to such high pending dues,” the source said.

In fact, the transport department should not experience a shortage of money considering the revenue raked in by the regional transport office. “The revenue has been consistently above Rs 5,000 crore over the past two years. In 2017-18, it reached Rs 5,950 crore, most of which comprises various taxes and fees on private vehicles. There should be an automatic arrangement to provide a percentage of this revenue to fund public transport,” a senior official said.

A BMTC official said over the years, as the cost of operation went up, RTCs in other states have been getting financial aid from their respective governments.

“In BMTC, we did get Rs 100 crore in 2018 and some exemption from tax. However, despite that, our losses stand at about Rs 300 crore,” the official said.

The revision of the pay scale in 2015 and the increase in various allowances has led to an increase in operational cost. The diesel cost, which soared last year, further added to the burden. “The four corporations require about Rs 2,400 crore. If the government clears its dues and allocates additional funds, there is no need to think of hiking fares,” the source in the government said.