KSRTC Proposes Fare Hike Following congress ‘s Shakti Scheme Losses and Broader Financial Strain from Populist Schemes

The Karnataka State Road Transport Corporation (KSRTC) plans to propose a bus fare hike of up to 20%, following significant financial losses attributed to the Congress government’s Shakti scheme. The scheme, one of the five “guarantee” schemes, offers free bus travel for women in Karnataka and has resulted in a Rs 295 crore loss for KSRTC over the past three months.

Financial Challenges and Proposed HIKE

KSRTC Chairman SR Srinivas emphasized the necessity of raising ticket prices to sustain operations. During a recent board meeting, it was decided to propose the fare hike to the chief minister. Srinivas highlighted the essential nature of bus services, noting that the absence of a bus driver can disrupt daily commutes for entire villages. He warned that without the fare increase, KSRTC would struggle to survive financially.

Similarly, Raju Kage, Chairman of the North Western Karnataka Road Transport Corporation (NWKRTC), also linked the corporation’s losses to the Shakti scheme. Kage pointed out that bus fares have not been increased in the last decade, yet the department continues to manage its financial challenges.

Impact on the Public due to the HIKE

The proposed fare hike is seen as a measure to recover lost revenue but may disproportionately affect those who do not benefit from the free travel scheme. Critics argue that increasing bus fares could be unfair to these passengers, adding financial strain to their daily commutes.

Broader Financial Strain from Populist Schemes

The Shakti scheme is part of Congress’s broader “five guarantee” schemes, which aim to provide various benefits to residents. These schemes have significantly impacted Karnataka’s treasury, as evidenced by recent statements from Chief Minister Siddaramaiah’s financial advisor, Basavraj Rayareddy. He noted that the state is struggling to fund development projects due to the financial burden of these guarantee schemes.

Economic Impact of Guarantee Schemes

Congress’s five guarantee schemes include:

• Gruha Jyothi: 200 units of free power for households.
• Gruha Lakshmi: Rs 2,000 monthly assistance for the woman head of every family.
• Anna Bhagya: Cash for each member of a BPL household instead of additional rice.
• YuvaNidhi: Rs 3,000 per month for unemployed graduate youth.
• Shakti Scheme: Free travel for women on public buses.

To fund these schemes, the state government allocated approximately Rs 52,000 crore in February, which proved insufficient. This has led to significant tax hikes and financial measures to sustain the programs. For instance:

• Excise Duty Increases: A 20% hike on Indian Made Foreign Liquor and increased beer taxes from 175% to 185%.
• Property Tax Hikes: Revised guidance values for immovable properties by 15-20%.
• Stamp Duty Increases: A 200-500% increase on non-registration documents.
• Fuel Price Hikes: A Rs 3 increase in petrol and diesel prices.
• Water Tariff Increases: Due to the water board’s inability to pay electricity bills.
• Milk Price Hikes: An increase of Rs 2 per packet, the second hike within a year.

Controversy and Criticism

The Congress government has faced criticism for allegedly diverting funds meant for Scheduled Castes and Scheduled Tribes (SC/ST) communities to implement the guarantee schemes. Reports suggest that around 37% of funds allocated under the Karnataka Scheduled Castes Sub-Plan and Tribal-Sub-Plan were redirected for these schemes.

Conclusion

The KSRTC’s proposed fare hike reflects the broader financial strain on Karnataka’s public services due to the implementation of populist guarantee schemes. While these schemes aim to provide immediate relief and support to many families, the long-term economic implications and sustainability of such measures remain a concern. The increased financial burden on the public, through higher taxes and levies, highlights the hidden costs of these so-called “freebies.”