COVID-19: India should act now to avert a bus sector collapse

The Centre should provide stimulus packages and chalk out long-term plan to revive te bus sector

By Sayan Roy
Published: Monday 07 June 2021

Last week, the Bengaluru Metropolitan Transport Corporation (BMTC), arguably the best public transport undertaking in India, announced it is in deep financial crisis. The news was not surprising as the BMTC incurred a loss of around Rs 400 crore this year due to lockdown and hike in fuel prices.

The worrying part is that other state transport undertakings (STU) are also facing a similar fate. The estimated budget deficit of Mumbai’s Brihanmumbai Electric Supply and Transport (BEST) for 2020-21 was a whopping Rs 1,887 crore.

The STUs had to bear almost 70 per cent of their operational costs during lockdowns when most of them didn’t run a single bus. Their demands for removal of the novel coronavirus disease (COVID-19) restrictions are growing louder.

Many transport operators have been forced to restrict their services and increase fares. BMTC has requested a 20 per cent hike in fares.

The bus sector is in urgent need of economic recovery packages provided by the Centre. The sector is not only the spine of public transport services in urban areas, it is also central to the country’s clean air action.

Weakening of the bus sector will also have detrimental impact on equity and accessibility for the masses in cities. The pandemic has already caused extreme economic hardship due to job losses and increase in cost of living. Increased bus fare will make public transport unaffordable.

In a city like Delhi, 34 per cent of commuters cannot afford the basic minimum fare of a non-air-conditioned bus, according to an earlier estimate by the Centre for Science and Environment, a Delhi-based non-profit.

Most bus users are captive users as they cannot afford anything else. The hike in fares forces people to walk and cycle long distances in extremely harsh traffic conditions.

It’s not only low revenue which is hurting the transit operators — the cost of operating buses has also increased due to fuel price hike and pandemic protocols. Transit agencies have to bear an additional Rs 17 lakh (including capital and operational expenditure including cost of additional manpower engagement) per 100 buses every month only to meet the safety protocol, according to an estimate provided by Bus and Car Operators Confederation of India.

The situation is much worse for private players. The public transport undertakings at least get some support and assurance from the government. But private operators are headed towards slow death.

This is, in turn, can cause loss of business and millions of jobs. Almost 30 million people in India earned their bread and butter from bus services and 90 per cent of them are from private sector, according to available estimates.

Survival of this bus sector is important, not only from the perspective of saving millions of jobs and earnings, but also to meet the commuting demand of the masses and especially, to access workplace. Almost 85-90 per cent of urban commuters are dependent of buses to move around in cities.

Learning from other countries

Several countries have already announced bailout packages to revive public transport services. England, the United States, Germany, Hong Kong and New Zealand have come up with direct financial support, whereas Singapore, China, Kazakhstan, and Turkey have come up with indirect financial support such as tax rebates.

Recently, Transport for London (TfL), London’s government transport body, received its third funding package of € 1.8 billion (almost 16 thousand crore rupees) to operate till Dec 2021. This takes the government’s total support to TfL since the beginning of pandemic (March 2020) to over € 4 billion.

Investment in transport sector has always paid off. During the economic recession in 2009, South Korea overcame the crisis by creating $ 60 billion green stimulus that, among other things, focused on energy-efficient transport, rail, and vehicles.

This was the highest any country had ever spent on green infrastructure to revive the economy. This not only lowered the unemployment rate in Korea compared to other OECD countries but also revived the economy significantly.

Similarly, investment in transport generates 31 per cent more jobs and supports the economy in a big way after great recessions, showed another study.

Bail out now

In India, except a budgetary provision of Rs 18,000 crore to buy 20,000 new buses, the central government hasn’t announced anything to revive the sector. Only a few states have provided some relief by removing motor vehicle tax for a certain period (mainly for three lockdown months during the first wave).

India’s ongoing second wave of the pandemic is more lethal than the previous one. Major cities are already going through months of lockdown, with some relaxation. Google mobility data has already indicated an overall 45 per cent dip in footfall from baseline — pre-pandemic February 2020 — at public transit hubs such as underground, bus and train stations.

Bailout packages, therefore, have become inevitable for transit operators. We have to keep in mind that even if the sector receives any recovery package now, it would still be a short-term solution. In addition, the government has to address long-standing issues like tax reform and create dedicated funds to secure operational expenditure. Otherwise, India’s urgent agenda of sustainable mobility will remain a non-starter. 



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