Facing financial crisis, BOCI and Karnataka State Bus Owners Federation seek help from Governme

Bengaluru, 25 July 2020: Bus & Car Operators Confederation of India - (BOCI) & Karnataka State Bus Owners Federation Bangalore representing district association of bus owners operating buses from various district of Karnataka and neighboring states urged the Karnataka government to provide immediate relief to the public transport sector which is on a stand still due to COVID 19 lockdown. The public transport sector has requested waiver of taxes, deferment of tax payments, extension of vehicle insurance validity, increase in price/fare on tickets, extending the loan moratorium and subsidies on diesel and tax reduction on spare parts for a stipulated period which would help reduce the vehicle running cost to save the sector from collapsing.

The Current fleet of vehicles under the Private Passenger Services is approximately4lakh in Karnataka. The extended lockdown has hit the sector hard with many operators in dire straits and on brink of closure.  When compared to other countries, in India public transport sector does not receive financial support, instead it has severe burden of taxation including GST on tickets and purchase of vehicle tires and spares, GST and CESS on fuel and lubricants and toll tax. 

Considering social distancing norms and only half the seats being used, paying tax for all seats per quarter in advance has affected the transport operators badly.  Due to non-operation of vehicles for more than four months, it has impacted the public transport sector severely. The layoff has also caused tremendous inconvenience to commuters, the salaried middle-class and unprecedented hardship for migrant daily wage laborers in India who depend entirely on public transport for their commute. The sector has made several representations to the authorities in the transport department, Ministries of state and to the Hon’ble Chief Minister of Karnataka to draw their attention to multitudes of issues faced by the sector and have urged urgent action to alleviate their pain.

The key asks of the sector to various authorities in the Government of Karnataka are:

Waiver on Motor Vehicle Tax for six months

Extension of Vehicle Insurance

Increase in price in tickets

Waiver on Toll tax for public transport vehicles

Reduction in State tax & CESS on Diesel for public transport sector vehicles for next six months

Portal access to interact with RTO for payment of fees, documentation etc. avoid person to person contact and reduce virus spread

Insurance coverage to drivers and transport workers plying during pandemic to ferry passengers, essential goods

Allow utilization of ESI / EPF funds to pay staff salaries

Viability Gap Funding for Public Transport 

Deferment of EMI payments for next 6 to 12months

Addressing this concern, Mr. Rajavarma Ballal, All India Sectorial Vice President of Stage Carriage Service Sector, Bus & Car Operators Confederation of India (BOCI)said, “Transport sector is one of the major sectors contributing to the economy of the state and the nation. Government must provide necessary support to revive the sector in these critical times by providing tax exemption and extension of loan repayment tenure amongst other provisions. Though Banks have extended the moratorium for few months, but they should extend the mortarium by waiving interest to existing loans because more than 80% of the vehicles are usually financed and many are availing the moratorium. The Central Government has alsoprovided COVID loan facilities for MSMEs. But as per the provision the loan facilities can be availed only by the owners of the travel companies. This loan facility must be extended to the individual owners who are using their personal vehicles for transport.  Also, the economic relief announced by the government to the public sector transportation must be extended.”

Mr. Prasanna Patwardhan, President, Bus & Car Operators Confederation of India (BOCI) said, India moves on public transport, as more than 90% of our people use it for their daily mobility needs. We have over 17 lakh operational buses on Indian roads, out of which, about 1.50 lakh buses are operated by various STU’s. The remaining 15.5lakh buses, accounting for almost 30 Crore passenger trips, are run by private operators which are the member of various Associations & Federations affiliated to Bus & Car Operators Confederation of India (BOCI). Being a labor-intensive sector, we request the government to support and save the sector from a total collapse. The fiscal relief sought will help the sector see through these tumultuous times.”

BOCI has also addressed these issues in a letter to the Honorable Prime Minister requesting for a job security of 1 crore people who have not been paid during the lockdown and requested government to take responsibility to pay salaries for 3 months. Rescheduling of all EMIs and Banks should be instructed to reschedule loans by giving at least six months moratorium period to all customers and to waived off the interest for the moratorium period. Banks and NBFCs should be advised to provide top-up working capital at low interest rates to resume business.


  (0)   Comment