by D.Dhanuraj

Kerala State Road Transport Corporation in the news again! This time, many believe that KSRTC will be grounded like Kingfisher airlines. Media reports that it incurs a loss of 8 lakhs rupees every day. The reason they cite is that of the recent hike in the Diesel Price. It was told that KSRTC has to shell out more money compared to the domestic car users as they fall in another category. It looks like the policy of the Government is NOT to promote public transport but the private vehicles. In that case, I do not agree with the Government prescription for more Sales Tax on Diesel for KSRTC as it breaks the rules in the game and having a level playing field with the rest of the competitors in the sector. Rather, Government should have lessened the Sales Tax to facilitate and support the public transport. This incident shows that private transport and private vehicles are encouraged while the public transport is neglected.

At the same time, I wonder whether the issues with KSRTC will be solved with the slashing of Sales Tax on Diesel.They have a long history of apathy and inefficient usage of resources. In my opinion, KSRTC is a good example for how a public commodity can be channelised for the political upmanship and poor management practices. KSRTC had mission when it was set up. In today’s world, that mission need to be innovated if it has to continue in the sector. With the opening up of the sector a few decades ago, KSRTC thrived in the sector with continued patronage from the Government and enforcing market monopoly principles in the select routes. It had the advantage of being always on the Government’s side to sustain itself in the market. KSRTC is neither good in Efficient distribution of resources nor in deciding frequency of bus operations in a particular route. It has accumulated losses over the years which is bigger in size compared to the recent losses incurred as a result of hike in Diesel price.

There is a larger debate whether KSRTC should exist in the current model or be closed down. Personally, I believe that the sector has to be revamped before we start thinking of revamping KSRTC. The definition of public transport shall have a wider meaning and accommodate players like Autos and Share Autos to meet the mission of better and accessible connectivity for the commuting public. Another complaint in this sector is about the misbehavior and rash driving by the private bus operators. In this case, the policy should encourage the transport operators to form cooperatives and the profit shall be based on the miles they operate and not on the basis of no of commuters board. Then comes the mission of KSRTC. It was set up to connect the interiors of the State where the transport options are limited. Now, the broader definition of pubic transport will help to bridge this gap by issuing permits to the share autos, the pressure and demand for KSRTC will come down. Even the nationalised routes shall be opened up in the Sector. In this scenario, if KSRTC has to exist, it shall be bifurcated into the regional corporations. KSRTC head quarters in Transport Bhavan in Trivandum shall not be the authority to judge the routes and the frequency for a particular route in Kazargod. In that case, efficient services according the demands and requirements of the local/region can be the prioritised by KSRTC local head offices. Even then, there should be market ethics and principles for the sector so that everyone in the sector is respected and no one is bulldozed.

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* Author is Chairman of Centre for Public Policy Research

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