The Maharashtra State Road Transport Corporation (MSRTC), popularly called just ST, was once called ‘a lifeline of the state’ due to its vast network, cheap fares and dependable services. Over the years, its condition has been deteriorating due to official neglect and an increasing number of private players in the ferrying people, registered and illegally operating. The cumulative effect is that MSRTC is becoming a white elephant to maintain.
Still, MSRTC continues to be the country’s largest road transport corporation in the public sector and also among major loss-making PSUs. Its financial woes were worsened by the Covid pandemic. The results between April 2020 and May 2021 show that MSRTC was in the red for over Rs. 10,000 crore. Many of its employees did not receive their salaries on time due to bad financial management while some actually breathed their last for lack of money. According to official data, MSRTC has had a fleet of over 17770 buses and had more than 96000 employees on its rolls not so long ago. The workers’ union has complained that just about 15600 buses are plying now, though almost 7000 of them are not in working condition. Another nearly 4000 buses will have to be scrapped within a couple of years. The reason is that no new buses have been purchased over the past seven years. Till then, about 2000 buses were replaced every year.
Contrast this with the increasing demand for good, comfortable ST buses from all parts of Maharashtra and their decreasing number consistently. Thus, there is considerable market potential and a golden opportunity to enhance ST’s revenue. However, the state government has not looked into these problems with adequate seriousness.
The workers’ union has regularly alerted the government about this apathy and demanded immediate measures to bail out ST so that the people who can’t afford to travel in private buses are provided the much-needed relief. The employees are concerned because their jobs are at risk. Most are beyond their middle age and can’t find alternative employment at this stage of their life. As a result, they are demanding ST’s merger within the state government so that they are secure. Even if ST is an organ of the government but legally, it is an autonomous registered entity. Hence, the salaries, allowances and pension benefits to the ST employees are not at par with the state government personnel.
The Maha Vikas Aghadi (MVA) government, while dealing with the ST workers’ strike last year, had stated in clear terms that it would not be possible to merge MSRTC within the government. The present Shinde-Fadnavis government so far has not found time to look into the ST’s worsening health, given the priority demanded by political issues. However, it has not indicated any inclination to accede to the demand for the merger, citing legal, administrative, and financial reasons. This stand has the foundation of the report of a three-member committee appointed by the Bombay high court. The committee has found out that MSRTC has been incurring huge losses every succeeding year for a long time. The data in the report, inter alia, says that MSRTC suffered losses of Rs 122 crore in 2015-16. In that year, the accumulated losses went up to Rs 1807. This shows that the losses began accumulating even prior to 2015-16.
Since 2015-16, MSRTC has suffered a loss every year. The amount of accumulated losses also kept on mounting. In 2015-16, MSRTC posted loss of about Rs 183 crore. In 2016-17, the loss was of Rs 523 crore and the accumulated losses shot up to Rs 2330 crore. The losses have been increasing ever since.
As COVID pandemic hit the country, troubles multiplied for MSRTC. The total loss in the year was Rs 1780 crore taking the accumulated losses to Rs 7099 crore. As per the recent projections, the accumulated losses are going to increase.
Official data shows that the accumulated losses of MSRTC are an estimated Rs 10,400 at the end of 2021-22. Against this backdrop, the state government has drawn up a revival plan for MSRTC. The plan was proposed to be implemented for five years, starting in the financial year 2022-23. During the five-year period, MSRTC’s fleet is proposed to reduce from 15380 in 2022-23 to 12880 in 2026-27. At the same time, the hired fleet is proposed to go up from 950 in 2022-23 to over 7000 in 2026-27.
The revival plan reveals that the revenue in 2022-23 will be Rs 9834 crore. Anticipating a steady increase, the revenue in 2026-27 is expected to be Rs 16878 crore. If this actually happens, the projected revenue will be 200 percent more than that of 2018-19. The estimated expenditure in 2022-23 of Rs 13882 crore will swell to Rs 16844 crore in 2026-27. Though it is difficult to believe, the revival plan has forecast a profit at the end of the five-year period. This will happen since the annual losses will go down from Rs 4048 crore in 2022-23 to Rs 904 crore in 2025-26. Hopefully, in 2026-27, MSRTC will earn a profit of over Rs 34 crore.
Like any financial projection, this rosy picture is painted by taking into account too many assumptions. The most important assumption is that there will be resumption of pre-Covid operations. The other hope is that the state government will accept the burden of the capital cost. The third reasoning is that diesel prices with the current rate as base will increase by 3 to 5 percent annually while CNG prices will increase at 10 per cent every year. The use of alternate fuels will bring down the total fuel bill and the increase in non-traffic revenue will contribute to the MSRTC kitty, the plan argues.
Many other assumptions outlined in the plan will not be so welcome. For instance, the plan assumes that fare revisions shall be carried out every year. This clearly indicates increasing fares year over year. Politically, hardly any government will permit this, especially when elections are round the corner. The plan advises that there should be no fresh recruitment during the five years. If this is allowed, improving the services will be a tall challenge.
As far as the employees are concerned, an attractive VRS package is dangled before them although it is still not finalised. This is precisely the focus of the union’s opposition since more intrusion of the private sector, after hiring buses rather than purchasing them, is certainly hinted at.
In short, MSRTC will and can revive, provided that there is enough strong political will. The problem is that such a will has been lacking. Till the time this attitude changes on the part of the government, the common traveller will be the sufferer.
A Column By
Dilip Chaware – Senior Editor
A media professional for 43 years, with extensive experience of writing on
a variety of subjects; he is also a documentary producer and book author.
