Karnataka bus fare hike lower than what was recommended by Public Transport Fare Regulatory Committee

KSRTC had sought a 38.66% increase, while the committee identified a technical fare gap of 32.33% and recommended a 28% revision.

The Public Transport Fare Regulatory Committee (PTFRC), chaired by retired IAS officer Atul Kumar Tiwari, had recommended a 28% fare hike for Karnataka State Road Transport Corporation (KSRTC), North Western Karnataka Road Transport Corporation (NWKRTC) and Kalyana Karnataka Road Transport Corporation (KKRTC), and a 45% increase for Bengaluru Metropolitan Transport Corporation (BMTC). However, the Karnataka government has approved a lower revision of 23% for KSRTC and 33-35% for BMTC.

In its report submitted to the State government and accessed by The Hindu, the committee cited rising expenditure on fuel, personnel, maintenance and capital operations, along with prolonged gaps between fare revisions, as reasons for the financial strain faced by the four State-run transport corporations.

The committee observed that the growing gap between the actual cost of providing services and the revenue generated through passenger fares had affected the corporations’ financial position, increasing their losses and liabilities. It also noted that improvements in operational efficiency alone would not be sufficient to address the structural deficit.

To determine the required fare revision, the committee adopted a Modified Annual Revenue Requirement (ARR) framework, which takes into account the efficient recurring cost of operations, eligible non-fare revenue and assured government support before calculating the amount to be recovered through passenger fares.

Based on this assessment, the committee’s report recommended a 28% increase for the three regional transport corporations under a harmonised fare structure, while suggesting a separate 45% revision for BMTC, considering its metropolitan operating conditions and cost structure.

The report also highlighted the difference between the fare increases sought by the corporations and the committee’s assessment. KSRTC had sought a 38.66% increase, while the committee identified a technical fare gap of 32.33% and recommended a 28% revision. For BMTC, the corporation had sought a 189% increase against a technical fare gap of 99.21%, with the committee recommending a 45% hike.

Similarly, KKRTC had sought a 39.45% increase, with the committee identifying a technical gap of 40.43% and recommending 28%. NWKRTC had sought a 39% increase, against a technical gap of 37.22%, with the recommended revision fixed at 28%.

The committee further recommended that any difference between the assessed fare requirement and the actual increase approved by the government be treated as a “policy fare gap”. It said the shortfall should be calculated separately for each corporation based on passenger distribution and actual operational data.

Since such a gap would arise from the government’s decision to keep fares below the level required for full revenue recovery, the committee recommended that the State government meet the shortfall through an identified and committed budgetary funding source. It also suggested that the funding amount and payment schedule be incorporated into the fare revision decision.

The report proposed an annual review of the ARR framework based on actual operational and financial performance, with periodic adjustments to prevent the accumulation of unrecovered costs.

It also called for transparent, stage-wise and service-wise fare schedules. While KSRTC, NWKRTC and KKRTC were advised to follow a harmonised fare structure for comparable regional services, BMTC was recommended to retain a separately calibrated urban fare structure reflecting shorter journeys and metropolitan travel patterns, according to the report.

The Public Transport Fare Regulatory Committee (PTFRC) is a three-member panel chaired by retired IAS officer Atul Kumar Tiwari. It was established to review the financial health of State-run transport corporations and recommend structured bus fare revisions.