Performance of West Bengal State Bus Transport Corporations: A Scale and Cost Analysis

Abstract

The road transport corporations act, 1950 was enacted to offer an efficient and economical system of road transport service in the country1. Road transportation has appeared as the leading part in India's transport sector with a share of 4.7 percent in India's Gross Domestic Product (GDP) in 2009-10 which is higher than Railways by 1 percent share2. India is the second most populous nation in the world and the seventh largest country in South Asia by geographically extending over an area of 32.9 Lakh square kilometres. To improve the living standard of the people road transport can adequately meet the growth of economic, social, health and cultural needs. Bus road transport is a cost-effective choice for the public for its efficient mobility in urban and rural areas. There are altogether 54 State Road Transport Undertakings (SRTUs) comprising 1,74,000 buses and carry about 7 crores of passengers per day. Over the years, these Public transport undertakings face severe problems and become loss-making. The accumulated deficits incurred by the reporting SRTUs from Rs.1,470 crore in 2003-045 to Rs.11,350 crore in 2015-166. The distress situation of the finances of SRTUs is reflected in the outcome of several factors which are overstaffing, fuel inefficiency, cost structure rigidity, high debt burden, and constrained autonomy in fare revision.