BMTC fare hike is irrational

Public transport is subsidised all over the world, because the benefits are of more value than the subsidy itself. But the government has never tried to subsidise it.

The bus fare increases are irrational, and unnecessary. There are at least three things which are wrong, and if these are fixed the bus service could be a lot better without needing to over-charge the poor.

a) The government needs to recognise, in its budget, that bus service is a public service that needs subsidy. All over the world public transport is subsidised, because it is well-known that the positive values that result – lower congestion, for example – are far in excess of the subsidy itself. For some reason, the Karnataka government has steadfastly refused to subsidise the BMTC. An annual subsidy of at least 200 crores is needed.

b) Government should have a proper parking policy, and enforce it. As long as public space can be treated as a freebie by shopkeepers and companies and home-owners, they will never fully realise the cost of their private choices. BMTC would be a lot more attractive if you had to pay to park your bike or scooter wherever you took it.

c)  Let ticket prices be set by a regulator, similar to BESCOM. The regulator can then force the BMTC to measure the ‘service’ levels and constantly improve them. Now, there is no clear metric for how good the service is, and many neighbourhoods don’t have bus service at all. A minimum level of service needs to be established for all parts of the city.

The sad part about so much of governance is that the answers to so many problems have been known for decades.

Comments:

  1. Dinesh Chandrasekaran says:

    What BMTC is doing is nothing short of exploitation. Ticket fare for 3-4 kms is now Rs.12. If you compare this with cities like Chennai or Hyderabad, the ticket fares are around Rs.5 for the same distance there. Besides, some conductors do not provide tickets and pocket the money from passengers who travel short distances. They are hardly any bus services after 9.30 PM in several routes and there are more Volvo buses than normal services in some others. Apparently, BMTC is one of the most mismanaged institutions in Bangalore.

  2. Rajiv Krishna says:

    The minimum fare is as high as Rs.6! This is exploitation of people! This is way too costly! Yes, they have to subsidize the rates! I don’t know how else should I travel to my college now! There must be a public protest regarding this! They have to roll back the prices and learn to manage the fares effectively! The transportation minister Ramalinga Reddy says that the diesel prices rose that’s why we rose the fares! How can he say that? They’re not at all thinking! If we keep quite they’ll rise it even more! I appeal to Citizen Matters to spread the message and pressure the govt to rollback the prices. Thank you!

  3. Ashwin Hegde says:

    I think many people have forgotten or are too young to know about the loss making BTC, the predecessor of the BMTC, from about 15 years ago. Service was terrible and the network was pathetically limited. The fact that BMTC has been profitable has enabled it to scale in a way that supported the exponential growth of Bangalore in the last decade and more, without the benefit of a rail based transport system that is only now being builtout.

    It’s the armchair rich and middle class who rarely use public transport who try to assuage their guilt by making such comments about subsidized public transport. Ofcourse it sounds great. Communism with its promise of perfect equality sounded pretty good too, to start with. It is the unintended consequences that kill us all. If BMTC was to run up a loss and depend on budgetary grants to bridge the deficit every year, it would be completely beholden to politicians and their whims. Routes would be decided purely on MLA/corporator/local bigwig demands. These are no doubt factor today in deciding new routes, but BMTC uses profitability of routes to decide whether to expand or shut down routes on an ongoing basis. Profitability is a very good proxy for demand besides being an objective towards which an organization can orient itself. A North Star if you will.

    Time and again, we learn, and forget, that the market is the most efficient way of allocating demand. Without the profit objective, BMTC could fairly quickly degenerate into lethargy. We then have a public transport system that ceases to be usable and hence useful. You then are forcing the poor to either waste even more time commuting, cutting into their earning potential, or forcing them off the system completely by buying a private vehicle like a moped or scooter, that is orders of magnitude more expensive. If you bleeding heart liberals want to see what the end result could be, you should check out Pune and its magnificently loss making bus transport. A paradise for the working classes, it is not.

    Besides, it is not that BMTC does not receive subsidies – almost all the new buses they have bought in the last few years have been subsidized 50% or more by the Central and State govts. Much better this subsidy on capital expenditure than an ongoing revenue subsidy with all the collateral damage that entail.
    Shame on you Ashwin Mahesh for catering to the lowest denominator now that you are politician. The one thing that in my mind separated Lok Satta from jokers such as Arvind Kejriwal and AAP was that you were not indulging in populism to buy votes cheap. This doesn’t help.

  4. Ashwin Hegde says:

    And what does “But the government has never tried to subsidise it” mean?

    Both BMTC and KSRTC have been profitable only since the time of (and thanks to) SM Krishna. Before that, they consistently ran up losses. Implicitly, that means they were sucking at the teats of the government for decades.

    Alteast get your facts right before indulging in hyperbole.

  5. BengaluruBudhi says:

    Profit and Monopoly .equals. inefficiency

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