Corporations in European states record lower revenues than JK

Hakeem Irfan
Srinagar, Feb 11: The idea of closing Jammu and Kashmir State Road Transport Corporation doesn’t appear a novel one considering the fact that the corporation recovers 70 per cent of its total expenditure, more than most European countries.

Senior officials in JKSRTC said that the corporation recovers Rs 5 to 6 crore a year, which is around 70 per cent of the annual expenses – Rs 8.5 crore – of the corporation.
Public transport systems throughout the world are essentially loss making and most European countries recover lesser amount of the total expenses on the corporations than JKSRTC.  
According to a study carried by Sustainability in the Public Transport Market (SIPTRAM) Project, the public transport system in Finland recovered only 67 per cent of its total expenses.
France only recovered 37.5 per cent money from its public transport until 2006 and now has improved with few per cent.  In Sweden cost recovery is only 60 per cent.
Senior JKSRTC officials said that the corporation was recovering Rs 23 crore a year in 1988-89 which has now gone down to a few crore. However, in spite of this SRTC is paying tax of Rs 5 to 6 crore to the government every year at a rate of 18 per cent with no help from the government.
As per the RTC Act of 1950 the Corporation should get the support of 66 per cent from the state and 33 per cent from New Delhi and it is supposed to be a separate body.
However other states pay only 6 per cent tax to New Delhi as per RTC Act of 1950, which officials said was indicative of partisan treatment the State gets.
New Delhi stopped funding the corporation from 1987 after which the corporation somehow managed to stay active till 1990.
Besides, presently SRTC has only 1 per cent share in the transportation market.
Andhra Pradesh SRTC (ASRTC) is one of the biggest services with 21000 vehicles plying and 99 per cent of roads under its control. SRTC has 1.2 lac employees and inspite of such a huge infrastructure the corporation runs in losses and is supported by the government.
Delhi Transport Corporation with 8000 vehicles and nearly 1 lakh employees is too running in losses but the salary of the monthly salary of the employees is Rs 24 crore which is paid by the government.
“JKSRTC has only 600 mobile vehicles with monthly expenditure of 3.4 crore expenditure monthly on the salaries but government pays only 15 to 20 per cent of it,” said an official.
According to a book ‘Management and Funding of Public Transport’ compensation for carrying out public service obligations is necessary for the public transport.
Public authorities have to pay transport companies to carry out an unprofitable service for the public.
Subsidies for the deficit coverage must be funded by public authorities through general budgets (central government, federal states or territorial authorities), the book specifies.
The book also specifies that “Public transport systems are systematically loss making...It is not possible simply to cover all the costs from the fares paid by the passengers.”