Taxation policy killing bus systems in cities across India

The Association of State Road Transport Undertakings on Thursday said that taxation policy is one of the issues behind the loss of bus services in major cities.

Among other states, Delhi Transport Corporation (DTC) is the number one loss making body, it said.

According to PS Ananda Rao, executive director of the association, government bus operators are liable for as many as 13 different taxes on their assets and operations.

“Transport authorities of states are public entity and it is not for profit. They pay motor vehicle tax and passenger tax and taxes contribute close to 20% of an STU’s operating cost. There should be an attempt to remove it,” Rao said at Connect Karo, WRI India’s three-day global conference being held in Delhi.

In 2015, of all reporting STUs, 10 STUs declared a surplus before taxes, but only three remained self-sufficient after clearing their direct tax liabilities.

Another issue, which was raised during the discussion, was manufacturing and funding of buses. According to the panelists, production of buses in 2009-10 was 46,000; the production is slated to be 80,500 by 2020; and 1,13,000 in 2030. However, India requires more than 3 lakh buses in cities alone.

“Across the country, buses form 74% of the mode of transport. In Delhi, 26% people resort to buses or walking as mode of commute. In all other cities, buses come next to walking as the most preferred mode of commute. In Mumbai, 30% of people resort to the city rail system for commutation. Chennai and Bangalore have a high proportion of two-wheelers. All mega cities have a minimum of 20% share of buses,” said Amit Bhatt, director in WRI.

HS Ashokanand, MD of north-east Karnataka State Transport Authority, said that there has been no increase in the fleet of buses in any state authority.

Funding of buses emerged as an important issue as private companies do not want to come forward unless they see a profit. “There has to be more trust as we treat private partners as contractors. If there is a good understanding, a good public private partnership can be developed. In the end, this will be the solution,” said MK Sinha from the ministry of urban development.

Even the tendering process of the government was criticised as it delays the procurement.

“While taking out tender, whatever is available in the market should be tendered out,” said Prashanth Bachu of WRI India.