Tamil Nadu Budget 2018: Package for STUs, all old buses to be replaced

Rs 27 bn allocated to transport department, including Rs 7.99 bn as subsidy for free bus passes to students, senior citizens

Looking to revive its debt-ridden public transport system, the Tamil Nadu government is in the process of converting the existing debt of Rs 30.01 billion into share capital assistance and replacing all old buses in use for more than 10 years with new ones. The state government, however, has not mentioned alternative fuels or hybrid buses in its Budget proposals for the year 2018-19.

In 2018-19, the state government shall infuse a share capital of Rs 6 billion into the State Transport Undertakings (STUs) for purchasing and inducting 3,000 new buses. This, along with the 2,000 new buses sanctioned during 2017-18, will lead to the replacement of all 4,593 old buses in use for over a decade. 

The general price hike and increase in salary costs have adversely affected operations of the STUs. In 2017-18, the state government released Rs 25.19 billion as 'special ways and means advance' to STUs to tide over their severe financial stress, settle retirement benefits of pensioners, give pending dues to existing employees and compensation dues to victims of road accidents. 

This was in addition to Rs 13.64 billion released as diesel subsidy, senior citizen subsidy, student concession subsidy and share capital assistance provided in the Budget Estimates 2017-2018. 

As a one-time measure, the government is providing a 'ways and means advance' of Rs 9 billion in the current Budget to the STUs. An amount of Rs 27.17 billion has been allocated for the transport department, which includes Rs 7.99 billion as subsidy for free bus passes to students and senior citizens, said the government.

While the government has roped in commercial vehicle major Ashok Leyland, based in Chennai, for electric buses as part of modernisation of the transport services, such plans has not made its way into the budget announcement of the government this year. In June 2017, the government had conducted a trial run of electric buses supplied by Ashok Leyland, which according to government officials, has performed satisfactorily. PWC Davidar, the secretary of transport department had said the state government would take up the initiative to introduce electric bus service permanently.

The state government's efforts to increase the revenue from the transport system had resulted in protest from the Opposition parties earlier this year. In January, the government had increased the fares for the transport corporations by 67 per cent, one of the largest hikes in six years. This had invited protests from the Opposition, including Dravida Munnetra Kazhagam (DMK), following which, within 10 days from the announcement, the government partially rolled back the fare hike.