Why are majority of Indian state road transport corporations always in loses despite charging high prices?

In India the State road transport corporation that is SRTC plays an important role in public transportation. They provide affordable yet accessible travel options for millions of people in the country. 

But do you know one thing? Even after charging at higher fares most of these corporations are running in loss. This loss is because of operational inefficiency, lack of proper vehicle maintenance, outdated fleet management, other financial struggles and the more important one is fuel costs which are rising every single day and of course the salary and other benefits might be high as comparing with private sectors. Apart from these concerns they also have competitive issues with the private transport agencies. 

This article is a study why major transport corporations which are undertaken by the state governments face loss and there is another part on how Karnataka state road transport corporation has managed all these problems and stepped into being up profitable business . 

Tamil Nadu State Transport Corporation – TNSTC 

Tamil Nadu operates one of the largest state transportation networks in India but still it struggles financially. Let’s take the example of the metropolitan transport corporation in Chennai. MTC faces many issues. According to an article 72.1% of MTC buses are overaged, so they often face breakdowns. MTC increased bus fare in the year 2018 which was a plan to increase the revenue but passengers shifted to private transport agencies instead of State transport which again led to decrease in revenue. Apart from this the corporation also struggled to pay salaries in time and that led to protest by the employees. To improve the revenue, they need better fleet management, route planning and a digital ticket system that might attract passengers. 

Kerala State Road Transport Corporation – KSRTC 

 Kerala transport corporation is one of the less performing transport corporations in terms of finance and revenue. Even though it is the

Kerala State RTC

critical option for most of the commuters the corporation still struggles with loss. They adhere to a high operational cost and they have a  large workforce with high salaries, this again increases their financial burden. Similar to Tamil Nadu corporation Kerala transport also still uses outage buses. So passengers seek a good comfortable transport option. Also KSRTC heavily depends on government subsidies. This is also one of the main reasons for their cash problems. Moving forward they need to redefine their workforce and focus on passenger experience. 

Pune Mahanagar Parivahan Mahamandal Limited – PMPML 

PMPML is a primary transport source in Pune and Pimpri Chinchwad. There is a growing demand for public transport in Pune. But still the transport corporation is running at a loss due to their heavy operation costs, insufficient and poor maintenance of the buses. It is mentioned that only 34% of their total fleet is operational. The other main reason is overcrowding and providing

poor service. They also lack infrastructure to improve the business they need to focus on electric buses. 

Andhra Pradesh State transport corporation – APSRTC 

APSRTC Bus

Similar to other transport corporations mentioned above APSRTC also faces financial issues despite being highly demanded service in the state. The major reason for their loss is the impact of infrastructure leasing and financial services crisis. This affected their funding and infrastructure projects. 

They face high financial loss of more than 6000 crore due to the government policies. Similar to Kerala corporation day to fall under over staffing and high salary struggles. In order to move forward into a profitable business they need better cost management. 

Some other reasons by the government which lead to loss in these transport corporations include their shift towards railway and metro networks. The Indian government primarily focuses on improving railways and metro projects. And their funding also decreased for SRTC’s across India. 

Also the government has promoted electric vehicles under the FAME policy but most of these transport corporations don’t have access to electric buses. Moving forward, the government needs to look after these corporations, help them clear debts and provide them with necessary infrastructure and improvements. This will help them to overcome all this financial struggles and move forward as a profitable

Karnataka state rtc

business 

Let’s come to the point of how Karnataka state transport corporation manages all the struggles and runs the business in a profitable zone. 

They have reduced their operational efficiency by removing unnecessary trips and optimizing the routes, all their fleets are modernized which increases service reliability. They have integrated technology like GPS and electronic ticketing that attracts more passengers. Financial management is one of the key pillars for their success that includes timely fire revision for the employees, cost control measures at regular intervals and their move towards sustainability like electric buses. 

In conclusion , these SRTCs need to follow Karnataka’s path and implement the same technique in order to be successful.