Karnataka road transport corporations seek ₹2,000 crore loan as free bus scheme reimbursement lags: Report

The corporations have accumulated liabilities exceeding ₹4,000 crore over the years.

Facing mounting financial liabilities, Karnataka’s four state-run road transport corporations (RTCs) have decided to secure a ₹2,000 crore bank loan to settle pending payments, including provident fund contributions, fuel expenses, and gratuity dues.

To ease financial stress, RTCs are looking forward to increased funding in the upcoming state budget. (Representational Image)

According to a Times of India report, among the transport entities, North West Karnataka Road Transport Corporation (NWKRTC) is set to borrow the highest amount at ₹646 crore, followed by Karnataka State Road Transport Corporation (KSRTC) at ₹623 crore, Bengaluru Metropolitan Transport Corporation (BMTC) at ₹589 crore, and Kalyana Karnataka Transport Corporation (KKRTC) at ₹141 crore.

A senior RTC official explained, as per the publication, that the corporations have accumulated liabilities exceeding ₹4,000 crore over the years. “The government has permitted us to take loans from nationalized banks with state backing, so we won’t have to mortgage any assets,” the official added according to the report.

Shakti scheme reimbursement pending

One of the primary reasons for the RTCs’ financial struggles is the delay in reimbursement under the Shakti Scheme, which offers free bus travel for women. Since its launch on June 11, 2023, the initiative has resulted in 381 crore tickets issued, with an operational expenditure of over ₹9,300 crore. However, RTCs are still awaiting a reimbursement of ₹1,800 crore from the state government.

To ease financial stress, RTCs are looking forward to increased funding in the upcoming state budget. Additionally, the recent hike in bus fares is expected to improve revenue.

Transport Minister Ramalinga Reddy attributed the financial distress of RTCs to the previous BJP-led government. “The accumulated burden of ₹5,900 crore stems from unpaid bills, wage revision dues, and other liabilities left behind by the previous administration. The state government is now facilitating these loans to clear the backlog while also ensuring that Shakti Scheme dues are addressed,” he stated as per the publication.