From the beginning of history, human sensitivity has revealed an urge for mobility leading to a measure of Society's progress. The history of this mobility or transport is the history of civilization. Moving persons or things from the originating point to the destination, 'Transporters' perform one of the most important activities, at every stage of advanced civilisation. Where roads are considered as veins and arteries of a nation, passenger and goods transported are likened to blood in circulation, enlivening economic activity of the Country. And Passenger Road Transport Service (PRTS) is an essential concomitant of economic development and it must keep pace with the growing requirement.

HISTORY

Passenger transport services were regulated by the District level police authorities, prior to the coming in to force of the Motor Vehicles Act, 1939, by issue of permits, known as free permits, enabling bus operators to ply their vehicles in different directions in the District in a day wherever passenger loads were available.

This situation led to severe competition among owners leading to unruly scenes and untoward incidents. With the passing of the Motor Vehicles Act, 1939, passenger transport was sought to be controlled and regulated by various provisions of the Act and the rules made thereunder.

Routes and areas were identified.

Permits were granted by the Regional Transport Authorities, imposing many conditions, the breach of which will entail penalties and even cancellation of permit.

The inception and growth of passenger transport upto 1952 in India and especially in Tamil Nadu is a tribute to the sagacity and enterprising spirit of the pioneers in the field who faced many a trial and tribulations.

In the words of Dr.Pattabi Sitharamaiah:
"The case of individual bus owner deserves patient understanding, close examination and careful judgment. He has committed no sin beyond sinking his money a quarter century back, upon an unknown industry with an uncertain future. After many vicissitudes, he had begun to make good when licenses, controls, regulations and corrupt practices destroyed his living. Now, suddenly to say that he shall surrender his business in the hands of local boards or Government is to do evil unto those who have done good."

During this period (pre 1952), the aftermath of two World Wars - the postwar economy was in shambles. Scarcity of every thing was the order of the day.

Fuel (Petrol) was in short supply and to be rationed.

To obviate the difficulty, gas plant was invented by indigenous expertise - by M/s Simpson and Co. and T.V.Sundaram Iyengar and Sons. Burning charcoal in the chambers, gas was produced. It was used as motive power.

With the ushering in of diesel engines in India, in the early 50's passenger transport scene acquired a new dimension, with heavy vehicles of larger capacity coupled with permitted higher level of speed criss crossing the Country, enabling mobility to thousands of our country men.

With the dawn of 5 year plan era in 1952, in the Country, which aimed at targeted growths of the economy in the proper perspective, public funds were pumped into the economy by various Government agencies, ensuring bright prospects for passenger transport industry.

MOTOR VEHICLES ACT, 1939 AND
GROWTH OF PASSENGER TRANSPORT:

Corporate bodies and a few individuals were holders of large number of permits operating in a particular area or route. They were able to offer reliable, punctual and economical services in their area of operation.

In the context of political awareness, socialist concepts pervading Indian politics and the profitability of bus service operation, Government issued guidelines to Transport Authorities to grant permits to new entrants and small operators. This has been vehemently resisted by the existing operators having recourse to the provisions of the Motor Vehicles Act, 1939. In the result it was found that the Act was restrictive in nature impeding growth of bus services and its expansion was not commensurate with the measure of demand for the service.

NATIONALISATION.

As the existing services were found inadequate and few of them ill organised, resulting in growing dissatisfaction among the travelling public in some areas, Government considered nationalisation of bus transport services as a means to ensure efficient, economical, adequate and properly co-ordinated services.

With these objectives in view, the Road Transport Corporation Act was passed in 1950 and Chapter IV-A was added to the 1939 Act to facilitate speedy nationalisation.

Various State Governments, having recourse to the provisions of the Act, implemented the policy of nationalisation.

In a number of major states of the Indian Union most of the stage carriage operations is in the public sector. The State Transport Undertakings (STUs) are in commanding heights in Andhra Pradesh, Tamil Nadu, Karnataka, Maharashtra, Gujarat, Haryana, Punjab and Delhi.

In other states, STUs performance are at a lesser scale.

In the process of nationalisation, one important human aspect was lost sight off.

While large fleet owners while displaced have diversified business to stay afloat, operators with one or two stage carriage permits, while displaced, had to face traumatic future, losing his capital and earning capacity abruptly and joining the teeming millions of unemployed.

With the growing requirement of Passenger Road Transport Services and the inability of the State owned Corporation to fulfill the need adequately, satisfactorily and economically, even after the lapse of 25 years after inception, a reassessment as to whether the policy of nationalisation will meet the needs of the people, was necessitated.

PATTABIRAMAN COMMITTEE.

Therefore, the Government of Tamil Nadu in 1977 appointed a Committee under the Chairmanship of Shri C.R.Pattabiraman to study the Transport Sector in Tamil Nadu and submit a report to it.

It will be appropriate, at this juncture, to read the following extracts from the report of the above committee.

9.1 In the light of the conflicting views given, the Committee has given full and careful consideration to the whole question.

9.7 With the exit of bigger transport magnates from the field, the question of nationalisation should be viewed not as a rigid policy or as a mere ideology, but as a means to the end - a better public service, provided this can be ensured by the public sector; the issue must be approached with pragmatism and not dogmatism, with determination and not vehemence, with flexibility and not vacillation.

Ideally, a pattern of co-existence must be worked out where there are mutual checks and balances, where there is a healthy competition between the private and the public sector but where maximum rationalisation could be achieved and where on account of nationalisation, the displacement in the private sector would be minimal.

Such an ideal state may be mathematically an asymptotic, if not indeterminate state. However, attempts could be made to reach such a state of dynamic equilibrium......"

PERFORMANCE OF STUs.

According to a recent findings of the sub committee on public transport in Tamil Nadu, the STUs in Tamil Nadu since 1980 have been incurring losses, marginal to heavy.

CUMULATIVE LOSS:

The statement below indicates the quantum of loss sustained by these Corporations from 1991-1992 .

DEBT EQUITY RATIO:

Their debt equity ratio has also gone up.

The state Government had to pump in a massive sum of Rs.182.44 Crores to bring the Debt-Equity Ratio from 1:16.92 in February 97 to 1:2.78 as on 31.3.1997.

FUNDING BY EXCHEQUER:

The details of loss incurred by all these State Transport Undertakings from 1995 to 1998-99 and funding by the Government to the State Transport Undertakings are indicated below:

Details of funds transferred from General Fund to the State Transport Undertakings.

OVER AGED BUSES:

Due to inability to generate adequate cash flow, the number of over aged buses in the fleet of the STUs in Tamil Nadu is as below.

The financial performance of all other STUs in the country were equally dismal, their respective entire Capital having been wiped out.
Performance of 40 State Road Transport Undertakings - 1985-86 to 1995-1996.

Thus the performance of all performance indicators were heading south necessitating fresh capital outlay by the Government out of tax revenue.

FACTORS CONTRIBUTING TO LOSSES - STUs AND PRIVATE SECTOR:

Phenomenal increase in operating costs is due to hike in HSD price and other inputs such as tyres, spare parts and wage bill, beside the increase in borrowed capital cost, the price of chassis which is periodically hiked, and the cost of body fabrication.
This is true in respect of both STUs and private sector.

SEVENTH FIVE YEAR PLAN.

The seventh five year plan envisaged an annual growth of 8% of bus fleets. Overall financial results of the STUs were disappointing. Considering the demand for passenger transport in the context of the difficult resource position, Seventh Plan aimed to allow the alternative of private operators meeting the shortfall within the frame work of an assured policy of the future role of private transport.
Inspite of the above clear-cut policy statement spelled out in the 7th plan, the State Governments, without seeing the writing on the wall, continued to permit the STUs to augment their fleet, placing an embargo on the issue of fresh stage carriage permits to private operators. This has resulted in contract carriages such as omni buses, vans and jeeps being pressed into service, which are less amenable to rules and regulations leading to chaotic conditions at bus stands as well as in the roads.

LATE REALISATION:

Oflate, it is being realised by the State Governments and they are encouraging private bus services in addition to STUs, and the STUs are directed to consolidate the gains achieved so far and concentrate on administrative and financial restructuring.
Some States like Karnataka started granting permits to operators. Andhra Pradesh has plans to utilise private buses on a contractual basis. Tamil Nadu has decided to allow mini bus services to be operated by private operators to serve unserved rural areas. They have also pronounced that there will not be any more displacement of existing private operators.

THE CHANGING TREND.

Please see the chart below.

The number of buses indicated are in thousands and relate to all India.

The phase of nationalisation has started to plunge down from 1976 after reaching the peak of 45.4% in 1975.
Now, it is 25.9% only.
However, in Tamil Nadu, the picture is totally different. The nationalised vehicles has risen to 15412 in 1996 from 5376 in 1973. However, in the private sector, the rise is from 3562 in 1973 to 5672 in 1993 and remains static there even now.

Why and how this happens? It is due to absence of a national policy on passenger road transport service.

21ST CENTURY - SCENARIO:

We are in the 21st Century and when have inherited the legacy of financial scams, industrial fiascos, discredited politicians, bureaucrats, slow down in industrial activity, demand recession and core sectors performances heading south.
However, population growth will be unabated and it will cross 1000 million mark by the turn of the century. As a consequence the demand for more public service will be pronounced. Traffic demand will be in geometric proportions.
As per the vehicles statistics of 1995, compiled by the Ministry of Surface Transport, Government of India, all India bus fleet consists of 3,00,000 vehicles in the private sector and 1,10,300 in the hands of 69 STUs.
In Tamil Nadu alone, 15737 vehicles are owned by 21 STUs and 5736 are operated by about 2000 private owners.
The number of vehicles they will have to pump in in this State during the years 1997-98 to 2001-2002 is 26490 at an estimated cost of 2800 Crores.
During this same period, the requirement of new buses for augmentation alone, in the whole country would be around 1,20,000 vehicles at an estimated cost of 12000 Crores.

VIABILITY and POSSIBILITY IN DOUBT:

Is there a scope for such a massive cash generation by the State Transport Undertakings in the Country when they are only losing every year as indicated above. Their accumulated loss has already crossed the 6530 Crores mark as indicated earlier.
Will the private sector also come forward to invest such a huge capital in the absence of an assured policy of the future role of the private sector?
Operational costs continue to be mounting due to the two automobile giants TELCO and Ashok Leyland continuing to hike the price of chassis. Cost of body building, price of spare parts and tyres are increased in tandem. Hike in insurance premium, wage bill, with Dearness Allowance component, shoots up annually. Road conditions deteriorate annually. Except a few stretches of national highways and state highways, Indian roads are full of bumps and potholes, encroached by way side stalls on the periphery of cities, towns and other urban areas. This has a telling effect on the wear and tear of the vehicle. The pace of capital goods' depreciation in the transport sector is many times quicker than in plant and machinery of industrial sector.
The observations made by the Sub Committee on Transport in Tamil Nadu that "these Corporations (STUs) have consumed the last iota of fat and are losing calcium from their bones" reflects the true health of the STUs in Tamil Nadu and in the Country.
Even in the 21st century, the scenario will be the same as it obtains today unless an economic miracle occur.

THE NEED OF THE HOUR -
RE WRITING NATIONAL POLICY ON PASSENGER BUS TRANSPORT.

As stated in the beginning of this article, passenger bus transport is an important means for mobility with its consequential benefits in the upgradation of the economy of the nation. Millions of people use this mode of service every day. Inadequacy or inefficiency or unreasonable pricing in providing the services leads to switching over to personalised modes of transport resulting in wastage of precious fuel. It is a globally admitted factor that moving through mass transport is cheaper and will be in the best interest of the nation and the citizen than moving through personalised modes of transport. And it must keep pace with the growing requirement.
A wrong policy, evolved while rewriting the Motor Vehicles Act in 1989, has created chaotic condition in the Country where there is lot of wastage of precious fuel and capital.
The policy is laisses-faire in the control and regulation of transport.
The rudimentary requirement of assessing need and then regulating supply by the Government through its Transport Administration which was available prior to 1989 and which ensured no wastage of precious resources and provision of adequate services at required times and at required places was given a go by in the name of liberalisation and eradication of corruption. In areas which the STUs had monopoly, the assessment of need and introduction of services were left to their discretion. In the areas where the STUs were not willing to come in to play, it was free for all. Any one could come and operate any number of vehicles. Water will find its own level was the philosophy put forth then by the persons at the helm of affairs when this policy was introduced.

What is the result?

The growth is not commensurate with the need in areas totally handled by the STUs. Too many people are chasing too few vehicles.
In the other area - the non nationalised one - it is totally a different picture. Too many vehicles chase too few people. Only people with money power, man power and muscle power are able to survive. There is enormous wastage of precious fuel and capital. And too many people have gone paupers and come to streets, losing every thing they invested because of the lure created by such a "free permit" system.
This condition applies to the goods transport sector also where also the free system has come into play.
The need of the hour is a clear cut National Policy on Passenger Road Transport Service. .
It is high time the Government undertakes a serious study of the whole post 1989 scenario in the transport sector and evolve a new national policy on passenger road transport service.

OUR PERSPECTIVES OF THE NEW POLICY.

In our perspective, the new policy should

1. ensure that need (demand) is pre assessed and supply is permitted by the Transport Administrators and it should not be left in the hands of the public or private sector operators.

2. ensure that the role of the Government, hereafter, will be that of a regulator of demand and supply and not an operator;

3. ensure that there is an ideal pattern of coexistence with equal rights between the public and private sector transport operators with mutual checks and balances, in all the areas of the Country and ensuring healthy competition among them, resulting in people getting the best of service at reasonable price.

4. ensure that there is no scope for creation of monopoly by either the private or State Transport Undertakings;

5. ensure there is an inbuilt scope for readjustment of services in accordance with the change in the need;

6. ensure that the pricing of the service will be fixed periodically, ideallly annually, or whenever there is a major increase in the input cost, independent of extraneous considerations, by a statutory Authority, consisting of a Judical Member, a Financial Analyst and a Technical Member, and whose decision will be binding on the Government for implementation.

7. ensure that the pricing is uniform in all the parts of the Country for services of similar nature like plain operations, city operations, ghat road operations, etc.

8. ensure that there is scope for the State subsidising the loss making routes deliberately required by the Transport Authorities to be operated, in public interest, and such subsidy should be in the form of grant of the route to any one who asks for the minimum compensation.

(The Government of U.K. offered subsidy to the operators to operate on loss making routes. The only difference is that the Government allotted routes to the persons who asked for the minimum subsidy.
If this system of subsidising is introduced, there will be no scope for any one saying that he is operating unremunerative routes and take shelter under such pretexts for inefficiency on his part. )