CITU rejects transport corporations finance details

CHENNAI: The Tamil Nadu State Transport Employees Federation, affiliated to CITU, has challenged several observations made in the state government's white paper on finances, arguing that the document presents a distorted picture of public transport corporations and fails to offer solutions to address their financial challenges.

In a detailed letter to the state finance minister, Marie Wilson, federation president A Soundararasan and general secretary K Arumuganainar said the white paper was right in placing the liabilities of transport corporations, the power utility, the Civil Supplies Corporation and the water supply board on the government's books, but erred in portraying expenditure on these public service institutions as a burden on the exchequer.

Taking exception to the white paper's assessment of transport sector finances, it said the comparison of diesel expenditure between 2020-21 and 2025-26 was misleading. While the white paper noted that diesel expenditure had increased from Rs 1,962 crore to Rs 5,598 crore, the union pointed out that 2020-21 was a pandemic year when a majority of buses remained off the roads due to lockdown restrictions.

The federation claimed Tamil Nadu's transport corporations have consistently recorded better fuel efficiency than their counterparts in Maharashtra, Karnataka and Gujarat, and have received several national awards for operational performance.

It also rejected the white paper's contention that bus revenue had fallen from Rs 8,827 crore in 2019-20 to Rs 7,646 crore in 2025-26. It said the figures failed to account for the State's free bus travel scheme for women introduced in 2021.

It noted that before the scheme, women passengers paid fares directly, and after its implementation, the government began reimbursing transport corporations through budgetary allocations. It said the government allocated Rs 3,500 crore to the scheme in the previous budget, and when this amount is added to fare collections, the effective revenue exceeds Rs 11,000 crore.

Alleging that reimbursement under a welfare scheme was being incorrectly classified as a subsidy to loss-making corporations, it accused sections of the bureaucracy of repeatedly portraying transport undertakings in a negative light.

Attributing corporations' financial stress primarily to structural factors, it said buses continue to operate on more than 10,000 routes, including services to remote villages and hill regions, despite many of them being commercially unviable.

It argued that low government-regulated fares have resulted in a widening gap between operating costs and earnings, despite high passenger patronage. It said a 2022 GO recognised the need to compensate corporations for the gap between revenue and expenditure.

Since then, the government should have paid nearly Rs 20,000 crore towards this deficit, but only Rs 2,646 crore has been released, the union claimed. The shortfall has forced transport corporations to depend on bank borrowings, resulting in a situation where Rs 13 out of every Rs 100 earned is spent on interest payments.

The federation further said that of the total debt burden of Rs 43,865 crore, nearly Rs 10,000 crore represents statutory dues payable to employees, including provident fund contributions and retirement benefits.