It is not just the Railways that are under pressure to hike passenger fares. Even the State-owned bus service providers - which serve seven crore passengers everyday - are facing similar pressure. The State Road Transport Undertakings (SRTUs) - Government bodies providing bus services within and across cities – are being asked to have automatic fare revision. The SRTUs recorded a net loss of Rs 5,260 crore on revenue of Rs 31,651 crore in 2010-11.
LINK FARE TO COSTS
“A mechanism should be evolved which can give the freedom to SRTUs to undertake fare revision automatically, depending on the increase in fuel and wage costs,” says a recommendation of the Central Ministry of Road Transport and Highways. Fuel and wage costs account for 72 per cent total operating costs of the SRTUs. While fuel accounts for 32 per cent of the total cost, manpower accounts for 40 per cent. “Usually, the State Governments interfere with fare revision and force the SRTUs to operate with no fare revision leading to loses,” the Ministry says.
The Union Ministry suggests amending the Road Transport Act 1950, under which the SRTUs are registered, to provide this freedom to SRTUs. There are 54 SRTUs in the country registered under the Road Transport Corporation Act, 1950.
The Ministry provides an example of Karnataka that has evolved a formula for automatic fare revision which provides for automatic fare revision based on percentage of increase in cost of fuel and dearness allowance.
“The formula has enabled revision of fares in a transparent manner, which is easily comprehensible to the commuters and also to State Government,” it says in its recommendation for the five-year plan starting April 1, 2012.
FISCAL CONCESSIONS
The Ministry also calls for a slew of fiscal concessions to improve the financial health for SRTUs given that these paid Rs 2,416 crore as taxes in 2010-11. There could be reductions in excise duty on diesel, motor vehicle taxes, among others. The SRTUs had 1.47 lakh buses as of March 2011, and consumed 3.2 billion litres of diesel annually.