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The eight State Transport Undertakings (STUs) in Tamil Nadu have been collectively incurring a loss of more than ₹452 crore per month in 2022-23 (up to February 2023).
“This monthly loss is almost equal to the pre-Covid level i.e ₹436 crore loss in 2019-20”, stated the Transport Department’s latest policy note.
Despite the salary hike given to employees due to the 14th wage settlement and increase in 2022-23, cost control measures have brought down losses to ₹452 crore, down from ₹552 crore per month in Covid-affected FY22 and ₹694 crore per month in FY21. In FY20, the combined losses were at ₹436 crore per month.
Straining financial positions
Soaring diesel prices, wage hikes due to the 14th wage settlement, hike in dearness allowance to the employees, increase in interest cost for availing additional loans for working capital including salaries, and statutory payments during and post Covid-19 period have been straining the financial positions of the STUs.
Currently, establishment costs like salary, provident fund, gratuity, etc. account for 53 per cent of the total expenditure of STUs, while diesel cost is about 28 per cent. The interest cost for loans is about 11 per cent.
The State government has been supporting STUs by sanctioning funds in the form of share capital assistance, loans, and Grants for purchasing new buses, settlement of statutory dues for retired employees, etc. An allocation of about ₹8,000 crore was made to the Transport Department in the Budget 2023-24.
Record revenue
Meanwhile, the Transport Department has reported a 34 per cent rise in revenue collections during the 11 months of this fiscal and FY23 revenue of the department is expected to be the highest ever.
The department, one of the major contributors for the state exchequer, has collected a total revenue of ₹6,674 crore during April 2022-February 2023, achieving 87 per cent of the targeted amount of ₹7,637 crore fixed for this fiscal. About 88 per cent of FY23 revenue came from motor vehicle tax collections and the remaining portion was accounted for by fees.
At ₹6,674 crore, the department already surpassed FY22’s revenue of ₹5,627 crore, and the previous highest annual income of ₹5,674 crore, achieved in FY20. The department has been collecting more than ₹5,000 crore in revenue in the past six years, barring FY21 (₹4,561 crore was the revenue collection).
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