The corporation made a Rs 7 crore profit in the financial year 2015-16, not much by industry standards, but remarkable for a corporation that has been in the red since its inception. Yet on closer scrutiny of the account books, there is hardly any reason for the corporation to celebrate for when you consider that the corporation gets an annual subsidy from the government of Rs 60 crore, then it means that KTC is still making loses and the profit it has posted is only notional. If not for the subsidy from the government, its actual loss for the year would be Rs 53 crore.
KTC came into being in 1981 and has been offering a reliable service for the past three decades. After 35 years, the corporation has had enough time to streamline its management and its services to start making a profit without having to depend on government subsidies. That the corporation is mismanaged can be gauged by the fact that for the last two months KTC has suspended its Goa-Mumbai service due to loses. For private bus carriers, this route is perhaps one of the most profitable given the passenger traffic between the metro and Goa. The fact that KTC has had to suspend services on this route means it is not able to compete with the private bus operators, nor offer a better service than what the private bus operators are offering. Here is where professional management comes into play and makes the difference. KTC has always been run by bureaucrats, not by professionals who follow management principles in their decision making and in the day-to-day running of a business entity. It is time to treat KTC like a business and not merely as a government corporation.
For that KTC needs to cut down its costs. According to the managing director of the corporation, in the last four years there has been an average annual increase of 12 per cent in revenue whereas expenditure has increased by 33 per cent annually. It should have been the opposite, or at least a closer gap between the two. This wide difference is indicative of the fact that some cost cutting measures are urgently required. KTC’s annual expenditure is Rs 150 crore and its salary bill comes to Rs 60 crore, which means that operational costs – fuel, maintenance etc – works out to Rs 90 crore. The corporation has to reduce the salary component as today it uses up the entire government subsidy of Rs 60 crore only on salaries.
KTC ensures that it points out to the fact that it takes up social obligatory services like plying on routes that are not profitable, going to far-flung areas and even converting their buses into school coaches. All that is expected from a State-run transport corporation, it, however, should not hold back KTC from innovation in other areas. KTC has experimented with shuttle services between the major towns, even using AC buses on these routes at time, and that service has been successful. The KTC MD also stated that the services to places like Shirdi, Hyderabad, Belgaum are profitable and these are being improved. Perhaps the corporation has to concentrate on these areas to offset the losses from the other routes.
The State-run corporation that has been around over a generation has reached out with its services across the State and to the people. KTC should now aim to change the way people perceive public transport. But for that it needs a major overhaul, first so that public transport can be more reliable in the State and second so that everybody – people across social strata – will not hesitate to use public transport.
