State road transport corporations (SRTCs), some of which are incurring losses in crores of rupees every year, may soon be given freedom to borrow money directly to revamp themselves. In addition, they could also fix fares on their own. However, the corporations may not be able to allow full autonomy to arms for selling or renting real estate.
These are some of the important amendments in Road Transport Corporation, 1950 that the Centre is considering to improve the financial position of SRTCs. As per latest data available with road transport and highway ministry, only six SRTCs earned profits during 2008-09. Among loss-making units, Delhi Transport Corporation topped the list with Rs 1,678 crore followed by Mumbai?s BEST at Rs 297 crore.
The changes have been suggested by a committee under the chairmanship of AL Agarwal, which has noted that deteriorating revenue position of these corporations is the result of minimal financial help from states, skewed motor vehicle taxes, rise in fuel prices and non-revision of fares for a number of years by state governments.
Till now, SRTCs can borrow funds in open market but need prior government nod. State governments also have to stand guarantee to the repayment of loans. ?Prior approval of state governments often delays the matter and in some cases renders the corporations out of availing such facility. In case the banker is agreed to provide loan without the involvement of states, the corporation should be allowed to raise loans directly without taking prior approval of the state governments,? the committee said in its draft report submitted to the government recently.
As the decision to fix fares is mostly ?political in nature? in the country and many a times lead to non-recovery of input, the panel said the corporations should be given the flexibility to take the final decision on the user charges.
However, the committee restricted corporations? powers to float subsidiaries for management of real estate. ?In no case the right of real estate can be entrusted to the subsidiary corporation. The subsidiary could be given assigned management of real estate but the right of final decision shall always remain with parent corporation,? the Agarwal panel said.
