The Kerala State Road Transport Corporation (KSRTC) has urged the state government to raise fares to March levels in light of a spike in fuel prices since then. The corporation had cut the minimum fare for its ordinary services by Re 1 to Rs 6.
An increase in diesel price by Rs 10 since March has put a huge financial burden on the corporation, the KSRTC wrote to the government. The corporation had requested the government to roll back the price cut in March itself, but the United Democratic Front government put it on hold because of the model code of conduct in force. The crisis has been aggravated after diesel price was increased by more than Rs 2 on June 1.
The Left Democratic Front government, however, is not very sympathetic towards the demand as a fare hike in its initial days may dent its popular image.
When the corporation decided to cut the base fare in February, the diesel price was at a low of Rs 46 on average. It was already dearer by Rs 2 by the time the decision was implemented in March. The diesel price rose to Rs 51 later in the month. It rose to Rs 52 in April and Rs 55 in May.
The decision to lower fare decreased the state corporation’s monthly average revenue by Rs 7.5 crore. The private bus operators, on the other hand, did not heed the government’s suggestion to lower prices.
The KSRTC guzzles 4.5 lakh litres of diesel per day. In three months, the diesel cost has gone up by Rs 45 lakh. An increase of Re 1 in minimum fare would result in an addition by about Rs 25 crore in revenue per day, the corporation’s management wrote to the government.
The corporation could cut the difference between revenue and expenditure from Rs 105 crore to Rs 35 crore through cess revenue and loans from the district cooperative banks, but a 39 percent increase in employees’ dearness allowance widened the deficit to Rs 75 crore. The decrease in fare and the increase in fuel cost have further ballooned it to Rs 95 crore.
The corporation’s pay and pension bill has increased from Rs 40 crore to Rs 52.2 crore after the DA hike. The corporation and the government had to find Rs 20 crore each to pay the salaries and pensions. Now the KSRTC is forced to raise Rs 12.5 crore more to pay its employees and former employees. It had to borrow Rs 50 crore from the Rs 300 crore credit line from the Ernakulam District Cooperative Bank to pay last month’s salary and pensions.
The corporation’s existence is threatened by the fuel price increases and the only way to tide over the crisis is an increase in fare, the management wrote to the government.
The corporation needs to generate Rs 7 crore revenue per day on average to turn a profit. The current daily revenue is Rs 5.5 crore. The corporation has thought up various means to increase its revenue, including a courier service.
A plan to start luxury services to crowded destinations such as Goa, Hyderabad, Chennai, Puducherry, Puttaparthi, Tirupati and Vailankanni is awaiting the approval of the respective state governments.
News : Malayala Manorama
