Election freebies in mind, as states step up free-ride schemes, losses for State Road Transport units keep mounting

State Transport Losses Reach Record High: Rising Costs and Freebies Add Pressure

State Transport Losses are reaching alarming levels, with losses exceeding Rs 30,000 crore in FY22. The financial condition of State Road Transport Undertakings (SRTUs) is deteriorating due to declining fleet utilization and rising fuel costs. Government reports show that year-on-year losses continue to grow, threatening the sustainability of public transport.

One major factor is the increasing number of transport-linked election freebies. Several states, including Delhi, Karnataka, Telangana, and Tamil Nadu, offer free bus rides for women. While these initiatives promote accessibility and gender equality, they put additional financial pressure on SRTUs. Without adequate subsidies or budgetary support, these losses could rise further, affecting daily operations and service quality.

The Ministry of Road Transport & Highways (MoRTH) addressed these concerns in its 2024-25 annual report. It revealed that 58 SRTUs recorded a combined net loss of Rs 30,191.93 crore in FY22. Although bus services were recovering post-pandemic, financial performance remained weak.

Apart from operational losses, SRTUs struggle with outdated fleets, high maintenance costs, and limited revenue streams. Many depend heavily on ticket fares, which remain unchanged despite inflation and rising fuel prices. Experts suggest fleet modernization, route optimization, and alternative revenue sources, such as advertising and commercial partnerships, to improve financial stability.

Additionally, digital ticketing and smart payment systems could enhance revenue collection and minimize leakages. Investment in electric and fuel-efficient buses may also reduce long-term fuel costs. Successful models in cities like Mumbai and Bengaluru show that public-private partnerships can ease financial burdens on state-run transport systems.

Immediate intervention is crucial. The government must provide financial aid, restructure fares, and implement efficiency-driven reforms. Without action, public bus services may face severe cutbacks, impacting millions who depend on affordable transport. A long-term strategy is essential to ensure the survival and efficiency of state-run transport services.