Transport Minister Ramalinga Reddy blamed the erstwhile BJP government for leaving the SRTCs burdened with ₹5,900 crore in unpaid dues, forcing the current administration to take a ₹2,000 crore loan to address the crisis.
Published Dec 30, 2024 | 12:16 PM ⚊ Updated Dec 30, 2024 | 12:16 PM
The Karnataka government is set to take ₹2,000 crore loan to address financial distress of the Transport Department. (South First)
According to sources, the Karnataka government has been forced to take a ₹2,000 crore loan to alleviate the severe financial burden of the State Road Transport Corporations (SRTCs) which are grappling with outstanding liabilities of ₹5,492 crore.
These liabilities include crucial dues such as Provident Fund (PF), fuel expenses, and arrears to retired employees. The government’s decision to take the loan comes in the wake of rising operational costs and delays in payments for the Shakti scheme, further straining the already cash-strapped SRTCs.
Launched on 11 June 2023, shortly after the Congress-led government took office in Karnataka, the Shakti scheme provides free travel for women in state-owned buses.
In light of these financial struggles, KSRTC employees are planning a protest on 31 December to demand overdue wage revisions and the release of 38 months’ arrears.
The fate of the protest on 31 December is likely to be decided based on the outcome of the meeting scheduled between the Labour Commissioner and unions of SRTC employees on 30 December.
State Transport Minister Ramalinga Reddy claimed that the government is committed to resolving these issues, with set to take ₹2,000 crore loan aimed at clearing outstanding dues and supporting the SRTCs in their financial recovery in the initial phase. He also urged the government to extend financial support in the upcoming budget for the fiscal year 2024-25.
PF dues account for ₹3,595.29 crore of the total debt, while gratuity and earned leave of retired employees add up to ₹399.29 crore. The balance of personnel dues, including gratuity and leave encashment, amounts to ₹306.87 crore.
Additionally, ₹659.25 crore is owed for fuel expenses, ₹146.78 crore to suppliers of spare parts, and ₹153.54 crore in accident compensation cases. The debt liability stands at ₹877.29 crore, with another ₹535.57 crore categorised under miscellaneous dues.
Despite the surge in revenue due to the implementation of the Shakti scheme, the Karnataka SRTC reported a loss of ₹295.43 crore, Bangalore Metropolitan Transport Corporation (BMTC) recorded ₹575.45 crore loss, North Western Karnataka Road Transport Corporation (NWKRTC) reported ₹322.48 crore loss and Kalyana Karnataka Road Transport Corporation (KKRTC) recorded ₹161.12 core in the fiscal year 2023-24, according to the Transport Department.
Meanwhile, the government owes ₹1,600 crore to SRTCs for the implementation of the Shakti scheme for the fiscal year 2023-24 and 2024-25 (till October); KSRTC ₹6,83.21 crore, BMTC ₹280.82 crore, NWKRTC ₹394.7 crore and KKRTC ₹335.67 crore.
NWKRTC Managing Director Priyanga M told South First: “The government owes approximately ₹400 crore to NWKRTC for implementing the Shakti scheme. I have formally communicated this to the government, and they have assured us that the dues will be cleared at the earliest.”
She added, “We regularly raise issues concerning our corporation with the government. Currently, the NWKRTC liabilities stand at around ₹1,600 crore. This includes arrears owed to employees, pending diesel bills, and gratuity payments.”
When asked if the delay in receiving funds for the Shakti scheme is impacting operations, she explained: “We are operating around 4,500 schedules, most of which serve rural areas. While our revenue has increased, so has the cost of operations.”
“We are currently operating at a deficit of ₹3 per km, with nearly 80 percent of our schedules running at a loss. The accumulated losses, combined with other pending expenses, contribute to our financial difficulties. However, we are performing better than last year,” elaborated the NWKRTC MD.
She also highlighted that no recruitments have been made in NWKRTC since 2016. “Recently, we have started recruiting staff and purchasing new buses. Every year, about 130 to 140 employees leave service due to retirement, accidents, or other issues,” she noted.
“We are striving to maintain the necessary manpower to run the notified schedules. Additionally, we have proposed a 10 to 30 percent tariff hike to the government to help cover expenses and address financial challenges. However, the decision to increase bus fares ultimately rests with the government,” concluded the NWKRTC MD.
KSRTC employees are becoming increasingly vocal about their long-standing grievances, including delayed wage revisions, unpaid arrears, and wage disparities.
Despite their critical role in implementing flagship schemes like Shakti, the workers allege that the government has repeatedly ignored their demands, including a wage revision.
Transport employees have been awaiting a wage revision as per rules effective from 1 January 2024, along with the release of 38 months of back pay tied to the increment due on the same date.
Frustrated by the lack of action, the KSRTC SC/ST Employees Association, along with other workers, announced plans to stage a protest on 31 December if their issues remain unresolved.
KSRTC SC/ST Employees Association General Secretary Venkataravanappa told South First: “There is a tradition of revising wages every four years. The previous pay revision, which should have been implemented in 2020, was carried out only in 2023 during the Bommai government. While wages were increased by 15 percent, arrears remained unpaid.”
He added, “After the Congress came to power, another pay revision was due on 1 January 2024. We have been demanding this revision for the past 12 months, but neither the chief minister nor others in the government are addressing our demands. Several retired employees should get the pension and other benefits, which has also remained due.”
“In October 2024, during a meeting with the Transport Minister, they admitted their commitment to revising wages and requested two weeks to resolve the issue. However, it has been two months, and no decision has been made. We even raised this issue during the winter session, but no progress has been made. How long will employees be expected to remain patient?” he asked.
Regarding recent developments, Venkataravanappa stated, “A meeting with the Labour Commissioner was scheduled for 27 December but was postponed due to the passing of former prime minister Manmohan Singh. It has now been rescheduled for Monday (30 December). The decision on whether to proceed with the 31 December protest will depend on the outcome of this meeting.”
He pointed out: “The Shakti scheme was the first guarantee launched by this government. We have been working tirelessly to ensure its successful implementation. While government employees were granted a pay hike of over 25 percent, our wage revision has been ignored. What injustice have we done to deserve this neglect?
“The government is allocating ₹60,000 crore for the implementation of its five guarantees. Is providing ₹5,000 crore for the transport department really such a burden?” he questioned with a note of caution that nobody wants to strike and inconvenience the public.
On the condition of anonymity, a KKSRTC employee told South First, “The issues we are raising are not new; we have been dealing with them for several years. There is a wage gap of around 25 percent between us (drivers and conductors) and government employees.”
“Additionally, transport departments in neighbouring states pay their drivers and conductors more than what we receive in Karnataka,” highlighted wage disparity.
He also pointed out concerns about basic pay and misuse of resources, adding, “Even after serving for 30 years, many employees still have low basic pay, and some don’t even meet the minimum standards. The government must ensure fair wages aligned with the work we do.
“Furthermore, the misuse of government vehicles and other resources by higher authorities needs to stop. This illegal expenditure is a significant reason for the financial losses faced by the SRTCs. The government must take action to curb such misuse of power,” he added that the KKRTC employees have also announced support for the 31 December protest.
Transport Minister Ramalinga Reddy blamed the erstwhile BJP government for leaving the SRTCs burdened with ₹5,900 crore in unpaid dues, forcing the current administration to take a ₹2,000 crore loan to address the crisis.
Alleging inaction by the BJP, Reddy pointed out that no new buses were purchased or employees recruited during their tenure, further deepening the SRTCs’ financial troubles.
Reddy told South First: “When the BJP was in power, it left behind a staggering ₹5,900 crore in dues across all the SRTCs. From 2000 to 2023, we had to settle arrears for around 11,000 retired employees. Recently, we managed to pay ₹223 crore to clear part of these dues.”
“The chief minister has allocated ₹2,000 crore to clear the pending dues of the SRTCs. It’s important to recognise that during the BJP’s tenure, no new buses were purchased, nor were any new recruits made.”
“In the past two years, we have purchased 5,800 buses, with 4,300 already delivered. Furthermore, we have been recruiting 9,000 new employees, including 1,000 hired on compassionate grounds,” highlighted the Transport Minister.
Reflecting on the financial condition at the end of his government’s tenure in 2018, Reddy said, “When we left office, the pending dues amounted to just ₹13.71 crore. However, by the time the BJP ended its term, the SRTCs were saddled with a ₹5,900 crore loan. Now, drivers and conductors are raising several demands before us.”
“There has been no increase in bus fares for the past five years in any of the SRTCs. In fact, it has been 14 years since BMTC last raised its fares. We need the government’s support to address these issues,” added Reddy.
He continued: “Recently, the government provided us with ₹223 crore and has committed another ₹2,000 crore. The government will take out a loan of ₹2,000 crore on behalf of our department. The department needs to repay the loan and its interest.”
Regarding the Shakti scheme, Reddy clarified: “The Shakti scheme is not directly related to the financial difficulties faced by the corporations. We are receiving grants from the government to implement the scheme.”
“However, it’s essential to note that diesel prices and employee salaries were significantly lower 14 years ago. Five years ago, when the SRTCs last raised fares, diesel cost ₹60 per litre. Now, diesel prices have risen to nearly ₹90, and salaries have increased as well,” Reddy said and added that they have not hiked bus tariffs for the last five years.
Reddy also emphasised the importance of government support for the SRTCs: “While the revenue of the SRTCs has increased, so have our expenses. The government has provided us with vehicle tax exemptions for new buses, which helped save ₹700 crore last year and another ₹500 crore for bus purchases.”
“It’s critical that the department receives priority in the next budget. If the government prioritises us, we can address employee demands and improve the financial condition of the SRTCs. I have raised these issues with the chief minister, and he has assured me that they will be addressed,” stated Reddy.
He further stated that the government must extend financial support to the Transport Department in the upcoming budget. “I am expecting that the government would announce financial grants to the department in the upcoming budget,” stated Reddy.
“The BJP government has left behind enormous debts in every department, with the total dues across all sectors nearing ₹1.75 lakh crore.”
“The employees of the SRTCs are well aware of these challenges, and we are committed to addressing their concerns. Even they are demanding a fare hike, and we will do our best to meet their needs,” Reddy said assuring that the financial issues will be addressed in phases.
(Edited by Muhammed Fazil.)
