CHAPTER - I1

EVOLUTION AND DEVELOBMQlT OF

TRANSPORT SERVICES IN INDIA

OVOLIITIUl AUD DEVELOPMENT OF ROAD TRANSFORT

SERVICES IN MDU

The word transport has been derived from the

Latin word ' transportare' . 'Trans' means across or

the other side and 'portare' means t o carry. Transport,

thus, means ta carry fran place t o another. Transport

as such i s a service which helps goods and persons to

be carr ied from one place t o another.

mTransport industr ies which undertake nothing

more than the me- movement of persons and things fran

one place t o another, have constituted one of the most

important ac t iv i t i e s of men i n every stage of advanced

civilisation". ' The importance of transport i s

increasing every day with the new developnent in the

f i e lds of ways, means, motive power, engineering techni-

ques, organisations, legal enacbnents and social, econo-

mic and po l i t i ca l factors. Hence the scope of the study

of transport i s much wider to-day. In th i s chapter a

detailed analysis of the evolution of passenger road

transport services i s undertaken.

2.2. BRIEP HISTORY OF mOR VMIffiES IN INDU

*The f i r s t motor vehicle appeared i n India in

the year 1898. Since then the nunber had been

increasing very slowly and reached an insignif icant

figure of about 1400 till 1905. Of these, qui te a

good number were cars purchased by wealthy persons

and landlords. Next i n importance were taxis. Thw,

motor t ransport i n t rue sense did not s t a r t before

World War-I i n Indiag. 2

The quotation ci ted above enlightens the fac t

tha t the motor vehicles appeared on Indian roads i n

the beginning of the present century, but the i r comer-

cia1 use could not be popularised till the World War-I.

During the period of the war, a large number of vehicles

were imported i n t o India f o r the purpose of defence and

a f t e r the termination of the war, the surplus vehicles

were disposed off and readily purchased by the small

entrepreneurs and the ex-servicenen and were used f o r

road transport purposes. "Thus the organisation of the

conmercial road haulage i n India real ly began just a f t e r

the World War-I. 3

The boom conditions assis ted and induced the

Operators to demand more and more vehicles to be used

f o r t ransport purposes and gradually the passenger

and goods haulage showed signs of progress. Consequ-

en t ly the number of m t o r vehicles of a l l kinds import-

ed i n t o India went up from 4419 i n 1913-14 t o 25,950 i n

1927-28.4 The depression d id not a f f e c t the industry,

ra ther the gradual increase i n the number of vehicles

affected the earnings of t h e railways, which were under

the s t r a i n of depression. The sizeable import of carmer-

cia1 vehicles, i.e., buses and vans, t h a t s ta r ted i n the

early twenties continued and i n 1938-39 there were i n

*Brit ish Indian 12,397 goods vehicles and 23,645 buses.=

During the Second World War the import of the

motor vehicles could not be matched with the demand for

the same even f o r the purposes of defence. During the

years of World War-11, the number of buses actual ly

declined and could touch the pre-world war level only

i n 194647. During the war years, therefore, the

industry suffered and the growth of the industry

retarded by events beyond the control of the Government. 6

I n the l i g h t of the above fac t s , it is c lear

t h a t the w e of motor vehicles f o r defence purposes

during the period of the F i r s t World War proved the

motor t ranspor t t o be a very important mode of

transport and i n subsequent years it became more

and mom popular gnong the Indian masses, specially

f o r shor t distances. Consequently, the number of

motor vehicles i n India went on increasing regularly.

This unabated increase in the number of motor vehicles

i n the country has been explained with the help of the

following Table-2.1.

Ever-increasing number of motor vehicles i n the

country a s shown i n Table-2.1, makes it clear t ha t the

motor vehicles have been gaining increased importance

i n the country. During the l a s t few years there has

been a tremendous increase i n the number of two-wheel-

e r s of d i f f e r en t makes and designs. Therefore, the

number of a l l types of motor vehicles has shown a very

high increase in 1984-85 w e r the f igures f o r 1980-81.

People i n India a r e not only using scooters, motor

cycles, mopeds, cars, etc., f o r t h e i r conveyance, but

the use of heavy vehicles l i ke buses and trucks has

been becaning more and more popular and consequent t o

which motor transport has come in d i r ec t competition

with the Railways.

Total NO. of Year Motor Vehicles Per cent of

All types (in increase Thousands) per year

With the development of road transport i n the

country, the then Br i t i rh Govennnent rea l i sed i t s

importance and appointed a number of canmittees and

study groups f o r the purpose of having recomnenda-

t ions f o r a f r ee and quick development of motor

transport i n the country. Mention may be made of

the following cannittees and Study Groupsz

1. The Jayakar Canmittee, 1927

2. The Mitchell Kirkness Canmittee, 1932-33

3. The Wedgewood C m i t t e e , 1936

4. The Transport Advisory Committee

5. The Motor Vehicles Act, 1939

6. The Post-War Policy Comnlttee, 1943

7. The Motor Vehicles Taxation Enquiry Cornnittee, 1950

8. The Study Group on Transport Planning, 1953

9. The Taxation Enquiry Comnission, 1953-54

10. The Motor Vehicles (Amendment) Act, 1956

11. The Motor Vehicles Taxation Enquiry Carmittee,

1966-67

A l l the above Camittees and Study Groups made

a detailed study of the condition of roads and road

transports, the extent of rail-road canpetition, the

burden of taxation, etc., and put forward a large

number of recarmendations t o the Gwernment t o improve

upon the above problens.

Fran the above, it can be concluded t h a t the

Government has been v ig i l an t enough to develop the

road transport i n the country and has been appointing

various cami t t ees and study groups to give reaomnenda-

tions t o f ind out proper solutions to the problems faced

by it. The r e m e n d a t i o n s of these c m i t t e e s and

groups have also been accepted by the Government f r m

time t o time t o the extent possible.

2.3. EWeROWCE OF BUS SERVICES I N INDIA

I t has been noted already tha t the motor bus

transport s tar ted in India i n the beginning of the

present century. Since then, there has been gradual

development of t h i s mechanical mode of transport. During

the F i r s t World War, the then Bri t ish Government in

India real ised the inportance of bus services and

imported a good number of buses t o be used fo r War

purposes. When the war was over, these buses were

disposed of f and used f o r c i v i l i a n purposes. During

the Second World War, the import of motor vehicles

was much r e s t r i c t e d and, therefore, it could not be

matched with i ts demand i n the country. Not only

the vehicles but even t h e i r spares were i n shor t

supply. There was rat ioning of petrol . Anyhow the

Govenment requisi t ioned t h e vehicles from the p a r t i e s

and used them f o r defence purposes, Consequently, the

populari ty of bus se rv ices increased enormously and

the nlnnber of buses on Indian roads went on increasing.

Table-2.2 ehows the number of buses running on Indian

roads.

The f igures i n t h e t a b l e make it c l e a r t h a t there

has been a steady progress i n t h e number of buses i n

the country. Withln a period of 39 years from 1950-51

t o 1988-89, the number of buses i n India has gone up

by 709 p e r cent which means it has been increasing a t

the r a t e of about 15 per cent per year. The chain base

index f o r quinquennal periods a l s o corroborates the r a t e

of t h i s increase i n the number of buses. The ana lys i s

a l so reveals t h a t the r a t e of increase i n the number of

buses has been canparatively higher a f t e r 1980-81.

T m E - 2 . 2

NUUBER OF BUSES mIA8

Year Number of Index Base Chain Base B u s e s 1950-51 Index

Another and t h e most important f a c t o r which has

been proved t o be a boon f o r t h e dwelopnent of bus

senrices i n t h e country i s the diversion of passenger

t r a f f i c t o bus t ranspor t frcin o ther means of t ransport ,

spec ia l ly from railways. Consequently, there has been

a gradual increase i n the percentage share of passenger

t r a f f i c car r ied by buses t o t o t a l passenger t r a f f i c i n

the country. The table-2.3 shows the proportionate share

of r a i l and road t r a f f i c i n the country.

TABLE-2.3

PROPORTIONATE SHARE 01 M I L AND ROAD TRAFFIC TO

TO ~oru P A G S ~ G E R TRAFFIC IN INDIA^ ( i n Percentage)

year Rail Road Total

The above t a b l e proves t h a t t h e bus t r a n s p o r t

has been ga in ing inc reased popu la r i t y y e a r a f t e r yea r ,

a s t h e pas senge r t r a f f i c has been changing r e g u l a r l y

from ra i lways t o road t r a n s p o r t . The percentage of

t o t a l pas senge r t r a f f i c c a r r i e d by r a i lways has come

down from 77.1 i n 1948-49 t o 74.2 i n 1950-51, 59.5

i n 1960-61, 48.5 i n 1970-71 and 20.0 i n 1987-88;

whi le it has gone up from 22.9 i n 1948-49 t o 25.8 i n

1950-51, 40.5 i n 1960-61, 51.5 i n 1970-71 and 80.0 i n

1986-87 i n c a s e of road t r a n s p o r t . These f i g u r e s

c l e a r l y prove t h a t t h e r e has been a remarkable develop-

ment of bus s e r v i c e s i n t h e country .

Like o t h e r i n d u s t r i e s i n t h e country , motor

bus t r a n s p o r t a l s o comes p a r t l y under t h e p u b l i c s e c t o r s

and p a r t l y under t h e p r i v a t e s e c t o r s . I n t h e beginning,

motor bus s e r v i c e s were rendered by t h e ind iv idua l

p r i v a t e owners b u t a f t e r Independence, t h e e r a of

n a t i o n a l i s a t i o n en te red i n t o a s some of t h e Indian

s t a t e s s t a r t e d t o n a t i o n a l i s e t h e i r bus s e r v i c e s . Thus,

pub l i c ownership of bus t r a n s p o r t came i n t o ex i s t ence .

u t t a r Pradesh was t h e f i r s t S t a t e t o n a t i o n a l i s e i t s

road t r a n s p o r t s e r v i c e s i n May, 1947. With t h e beginn-

i ng of coope ra t ive movement i n t h e country i n 1950-51.

cooperative Socie t ies were a l so s e t up t o render bus

services. Thus, road t ranspor t services i n t he country

are being run under t h e following three gervices:

1. Pr ivate Sector Bus Transport

2. Bus Service cooperative Socie t ies

3. S t a t e Bua Services - Nationalisation of

Bus Transport i n India

2 . 1 . PRIVAm SECTOR BUS SERVICES

In t h e beginning, ownership of passenger buses

i n India was sole ly under t he pr ivate sector . It i s

only a f t e r Independence t h a t the public s ec to r has

stepped'in, bu t even today nearly th ree - f i f t h of the

t o t a l number of buses plying on Indian roads a re

pr ivate ly owned.1° In s p i t e of the emergence of t h e

public and t h e coowra t ive sectors t o m n bus services

i n t he country and the policy of t he Government of

India t o na t iona l i s e bus services more and more, the

importance of t he pr ivate s ec to r bus t ranspor t can not

be lowered down. Even today, it plays a predominant

ro le i n t he country as a whole. T i l l today, i n Goa,

Diu and Daman, and Pondicherry, bus services are

almost t o t a l l y i n t he pr ivate s ec to r and i n t he country

as a whole, t h i s s ec to r covers about 40 per cent of the

t o t a l bus services .

Like a l l o ther indust r ies , the organisa t ional

pa t tern of p r iva t e s ec to r bus services may be e i t h c r

a jo in t stock company, a partnership f inn o r a so l e

proprietorship.

At presant i n India, no jo in t stock company

o r par tnership £inn is rendering bus services. Though

in some s t a t e s l i k e Tamil Nadu, Kerala, Karnataka and

Gujarat a few companies were s e t up t o render bus

services, they could not survive f o r long and went

i n to voluntary l iquidat ion. The same happened with

the par tnership £inns, as they could not run route bus

services e f f i c i en t ly , though they s t i l l e x i s t t o run

contract aervices. Thus, t he pr ivate s ec to r bus trans-

port services a r e sole ly under the so l e proprietorship

and a r e being operated by the individual operators.

Theae individual operators have fonned t h e i r mutual

associations and unions i n order t o minimise the

competition which they face among themselves and a lso

t o make t h e i r services more p ro f i t ab l e by f ix ing times.

Providing bus s ta t ions , garages, workshops, etc. , t o

deal with the a u t b r i t i e s co l l ec t i ve ly and s o on and so

f 0rth.

2.5. BV8 SERVICE CO-OPERATIVE SOCIETIES

Road Transport Co-operative Soc ie t i e s a r e

another f o n of ownership, which is a recent d e v e l o p

ment s t a r t e d with the beginning of t h e co-operative

movement i n t h e country i n 1951. Though such socie t -

i e s were s e t up i n t he beginning, t h e i r number could

not a t a l l be encouraging. Besides, t he re has been a

continuous decl ine i n t he number of such soc i e t i e s .

Here, it i s re levant t o mention tha t t he re i s no

cooperative ownership of bus services , bu t individual

owners a r e providlng bus services on the bas i s of t h e i r

mutual co-operation.

The following Table-2.4 shows the development

of road t r anspor t cooperatives as s e t up in t he country.

Year Number of Index Baae Chain Base Socie t ies 1965 Index

The above t a b l e is self-explanatory. The

n&er of road t ranspor t cooperative s o c i e t i e s , though

increased i n t h e beginning of t h e cooperative movement

i n t h e country, has been dec l in ing year a f t e r year, as

t h e i r number went up from 37 i n 1955-56 t o 99 i n

1960-61 but came down t o 71 i n 1970-71, 52 i n 1975-76

and 31 i n 1980-81. This dec l ine i n number is because

of two reasons - f i r s t l y , t h e huge c a p i t a l requirements

which a r e beyond the capacity of these s o c i e t i e s r and

secondly, t h e business being r i sky and not s u i t a b l e t o

the cooperatives.

The Table-2.5 shows t h e nature and t h e number

of road t ranspor t cooperat ive soc ie t ies .

TABLE-2.5

ROAD TRANS- CO-OPERATIVE SOCIETIES I N IM)IA~'

!;: Nature of the Soc ie t ies 1960-61 1970-71 1980-81

1. No. of s o c i e t i e s render- ing passenger se rv ices 19 9 -

2. No. of s o c i e t i e s render- ing goods se rv ices 48 4 1 2 5

3 . NO. of s o c i e t i e s render- ing both goods and passenger s e m i c e s 3 2 21 6

Tota l 99 7 1 31

The figures in Table-2.5 clearly indicate that

the number of these Societies has been declining rapidly,

specially in the case Of societies rendering bus services.

~t present, there is no Society in the count-, which

might be rendering bus services only. Though there are

six rocieties (1980-61) rendering both goods and passenger

bus services, major portion of their business is confined

to goods services only.

2.6. PUBLIC SECTOR PASSENOBR ROAD TRANSPORT IN INDIA - AN

OVERVIEW

It has been already pointed out that after the

First World War motor bus transport became much popular

and severe competition started with railways. Besides,

there was a cut-throat competition among the bur operators

themselves, which increased enormously during the period

of great depression. Consequently, there was a huge cry

to organise these operators who were totally unorganised

and scattered till then. Therefore the Oovernment appoint-

ed the Road Developnent Committee, 1927 and the Mitchell-

Kirkness Committee to give recornendations and solution

to the problems, but nothing concrete could be done till

Independence. The enactment of the Motor Vehiclea Act,

1939 was also an attempt in this direction.

I n t h i s regard, t h e Centra l Government and t h e

Railway Board d ra f t ed a scheme i n 1945, which was t o s e t

up Road Transpor t Companies wi th t h e mutual cooperation

of t h e Railways, t h e S t a t e Governments, and t h e p r iva t e

bus operators . The p r i v a t e bus operators d i d not coop-

e r a t e with t h i s scheme on t h e grounds t h a t t h e i r i n t e r e s t s

would be ignored, a s they were i n minority. Hence, t h e

scheme could not be mater ia l ised.

Some of t h e Old Indian S t a t e s s t a r t e d t o run t h e i r

bus se rv i ces , eg., Madhya Bharat i n 1916, Hyderabad i n

1932, Trabunkore-Kochin i n 1938 and Kachha i n 1942. 13

But i t was a l l i n vain and t h e bus se rv i ces could not be

organised properly. The n a t i o n a l i s a t i o n of road t r anspor t

i n Ind ia s t a r t e d i n May 1947, when the U t t a r Pradesh Govern-

ment na t iona l i s ed i t s bus t r anspor t . The o the r s t a t e s t h a t

followed U t t a r Pradesh i n na t iona l i s ing t h e i r road t rans-

port s e rv i ces were Madras i n 1947, Assarn, Bihar, Bombay,

Orissa, Punjab, West Bengal, Delhi i n 1948, Himachal

Pradesh i n 1949 and Rajasthan i n 1960.

Thus having been s t a r t e d from U t t a r Pradesh i n

May 1947, S t a t e bur se rv i ces i n t h e country have been

increas ing y e a r a f t e r year. Barr ing Goa, Darnan,and Diu

and Pondicherry, almost a l l the S ta tes and Union

T e r r i t o r i e s i n t h e country have nat ionalised t h e i r

bua services e i t h e r f u l l y o r part ly.

A s a r e s u l t of t h e policy of the Government

of India t o na t iona l i se t h e passenger bus service

more and more, there has been a steady developnent

of the S t a t e bus services i n t h e country and the

percentage of nat ionalised bus services t o t o t a l bus

services has been increasing unabated. Consequently,

during 1988-89 percentage of nat ionalised bus services

t o t o t a l bus services in t h e country has touched the

leve l of about 60 but it i s only 35.6 on t h e bas i s of

the t o t a l bus f l e e t i n t h e country.14 Table-2.6 shows

the ownership pa t te rn of bus f l e e t by Private and Fublic

sec tor se rv ice since 1960-61 t o 1988-89. I t can be

seen froin t h e t a b l e t h a t t h e percentage of public sec tor

ownership t o t h e pr iva te s e c t o r ownership shown an

increasing trend from the year 1960-61 t o 1978-79 1.e.

from 31.6 per cent t o 52 per cent respectively. But

a f t e r 1978-79 it has shown decreasing trend and par t i -

cu la r ly i n t h e year 1988-89, it i s surpr i s ing t o note

t h a t the public sec tor mad transport forms only 35.6

per cent and pr iva te s e c t o r forms 64.4 per cent of the

TABLE - 2.6

TARLE SHOWING OWERSKIP PATTERN BY PRIVATE AND

PUELIC SECTOR SERVICE SRICE 1960-61 X1 1988-89

Ownership Percentage of Ownership

Year psir Publ i c Sector Private Public Private of Buses (",mb;; of Sector (Number of Sector Sector

Source: Report On the performance of National ised Road Transport Undertakings, Compiled by CIRT, Pune, 1988-89, P.2.

t o t a l ownership of bus f l e e t i n India. This c l e a r l y

shows t h a t t h e process of n a t i o n a l l a a t i o n of r o u t e s

i n t h e S t a t e s i s t ak ing p lace a t a slow pace. The

graph showing t h e growth of f l e e t ( P r i v a t e and Publ ic )

i s given i n t h e appendix. 2

2 . 7 . PATPERN OF WAOEbC3NT OF SRTUs I N INDIA

As a l ready observed, a s i n 1988-89, a l l the

S t a t e s and Union T e r r i t o r i e s i n Ind ia , b a r r i n g a few,

have passenger road t r a n s p o r t se rv ices operated by one

o r more publ ic s e c t o r undertakings. They a r e organised

e i t h e r a s Corporations under the Road Transport Corpora-

t i o n Act, 1950 o r a s Jo in t Stock Companies o r Departmental

undertakings.

Table-2.7 h i q h l i q h t s t h e number of SRTUs i n the

country be ing managed under d i f f e r e n t fonna of management.

TABU-2.7

PAlTERN OF EUNAQEXENT OP SRTUs I N INDIA^'

S.No. P a t t e r n of Management No. of SRTUs Percentage

1. Departmental Management 8 11.9

2. S ta tu tory Corporate Fonn 21 31.3

3. Govt. Company Ponn 27 40.3

4. nunlc ipa l Undertaking8 11 16.5

Tota l 67 100.0

P i p u n s i n Table-2.7 c lear ly highlight t h a t the

company form of management of SRTUs in the country i s

more p ~ p u l a t , a s out Of 67 SRTUa i n a l l , 27 a re being

managed under this foam, The departmental form of manage-

ment c w e r s only eight undertaklnga being around one-third

of the corporate form. i.e., 2 1 SRTUs come within the

s ta tutory corporate form. Though the government company

form of management of t h i s industry is very popular, it

i s sui table t o manage amall SRTUs only. Consequently,

most of the c i t y bua undertakings i n the country are

being managed under t h i s form, while a l l mediw and big

ones a re being managed e i t h e r deparbnentally o r under the

corporate forms. Besides, t h e n are municipal bus trans-

por t undertakings providing e i t h e r c i t y bus services o r

the services on one o r more se lected routes.

2.8. BRIEF HISTORY OF THE ORIGIN OF VARIOUS PUBLIC TRANSPORT

CORPORAIPIaS I N TAMIL UADU STATE

To s t a r t with, i n Tamil Nadu Sta te , there was

only a S t a t e Transport Department catering t o the long

distance t ravel needs of the t ravel l ing public. The

idea of forming di f ferent transport corporations took

b i r th i n ear ly seventies. To begin with, four Transport

Corporations were formed i n the year 1972, under the

m p a n y form of management, i n the name of Pallavan,

Pandiyan, Cheran and Cholan with the object of provid-

ing better, e f f ic ient , adequate, economical and a viable

system of road transport services with headquarters i n

Madras, Madurai, Coimbatore and Tanjore respectively.

When t h i s concept gained popularity, the State Govern-

ment with a view t o extending bet ter and adequate

transport f a c i l i t i e s t o other d i s t r i c t s formed subsequ-

ently several other Transport Corporations under company

pattern of management. Thus, beginning i n early 70's.

there are now f i f teen Transport Corporations i n Tamil

Nadu formed under the Canpanles Act. The deta i l s of

these Corporations are presented in Table-2.8. As on

31st March 1989 these f i f teen Corporations together own

a f l e e t of 12,623 buses and collectively they form one

of the biggest s t a t e public sector undertakings in

the State.

60

TABLE-2.8

NUMBER OF TRAPISPORT COWORATTOUS M TAMIL NADU STAm

As M 1988-8916

S1. Date of Date of NO. Name of t h e Corpora- Incorpo- commence-

t i o n r a t ion ment of Business

Pallavan Transport Oorporatlon Ltd., (PTC)

Pandfyan Roadways Corporation Ltcl., (PRC)

Cneran Transport Corporation Ltd., (CTC)

Cnolan Roadways corporat ion Ltd., (CRC)

Anna Trans o r t Ltd., (mcV

Corporation

K a t t s b a m n ~ Transport Corporation Ltcl., (KTC)

Thanthai Pe r iya r Transport Cocporation Ltd., (TPTC)

Thiruval luvar Transport Corporation Ltd., ( ~ T c )

Pa t tuko t t a i A lag i r i Transport Corporation Ltd., (PATC)

M-u Pandiyan Transport Cozporation Ltd., (MPTC)

Jeeva Transport Corporation Ltd., (SPC)

12. Nesmony Transport Corpora- t i o n ~ t d . , (NTC) 16-02-1983 01-04-1983

13. Rani n a n g m a l TrMSpoIt Corporation Ltd., ( M C ) 1986 1986

1 4 . Deeran Chinnamalai Transport Corporation Ltd., (DCTC) 1986 1986

15. Annai Sathya Transport Corporation Ltd., (ASTC) 1987 1987

Though t h e Planning C m i s s i o n was i n favour

of Road Transport Corporations formed under the Road

Transport Corporations Act, t h e decision t o form

companies i n Tamil Nadu was taken presumably because

t h e then Dravida Munnetra Khazhagam Government thought

t h a t it would amount t o surrendering a p a r t of the

S t a t e ' s autonomy t o the Central Government which i s

made a p a r t of these undertakings. These Corporations,

therefore , have no c a p i t a l p a r t i c i p a t i o n frun t h e

Central Government and thus these companies a re f u l l y

owned and funded by Government of Tamil Nadu.

The Tamil Nadu experiment i s a bold, new idea.

There is no s i n g l e Corporation f o r t h e e n t i r e s t a t e .

The u l t imate aim is t o have a separate Corporation

f o r each d i s t r i c t . They a re , however, united by a

holding company a t Me S t a t e leve l , which i s meant

t o co-ordinate policy and maintain a common cadre

of s e n i o r managers. Thesc small, separa te companies

have done f a r b e t t e r than most big Corporations i n

o ther S t a t e s i n India and i n t h e case of area-wise

na t iona l i sa t ion , these small, separate cmpanies

account f o r nearly s i x t y per cent of the t o t a l area

of operat ion i n Tamil Nadu.

The advantages of the canpany form

c o n s i s t of:

i) combining Government ownership with business

outlook c h a r a c t e r i s t i c s of p r i v a t e en te rpr i se ,

i i ) r e s u l t o r ien ted - a s aga ins t bureaucrat ic - approach a t managerial l eve ls ,

i i i ) easy take-over of p r i v a t e e n t e r p r i s e by

acquir ing majori ty shares,

i v ) enabling p r i v a t e p a r t i c i p a t i o n , including

t h a t from i ts own employees i n c a p i t a l , and

V) comparative autonomy i n f inanc ia l , personnel

and o ther matters.

However, the company form of organisat ion f o r

publ ic e n t e r p r i s e has been c r i t i c i s e d by Professor

Robson charging t h a t " i t is i n no way an instrument

of democratic social ism but i s r a t h e r a device f o r

avoiding publ ic accountab i l i ty and ~ o n t r o l " . ~ ' I t i s

a l s o looked upon a s a device t o escape l e g i s l a t i v e

scrut iny. 18

But it w i l l not be i r re levant t o quote here

the opinion of A.H. Hansonr * I t does not r ea l ly

matter whether you c l a s s i fy the enterpr ise a s a

publ ic corporation, a publ ic canpany o r a Government

department. But the rules governing the operation

of t he enterpr ise - whether they a re embodied i n a

law of decree o r a r t i c l e s of association o r terms of

agreement - a re very important indeed, because t o a

considerable extent they determine the pract ices which

the management of t he enterpr ise w i l l have to follow".19

In t h i s context it i s t o be noted t h a t out of

f i f t e e n t ranspor t corporations i n Tamil Nadu, t h i r t een

corporations a re running under continuous losses i n sp i t e

of t h e i r being small and manageable i n s ize . Their

f i nanc ia l posi t ion 13 so poor t ha t they could not

even carry on t h e i r day-to-day operations without

resor t ing t o large sca l e borrowings f ran outside a t

a high r a t e of i n t e re s t , l e t alone t h e i r expansion

programmes. It i s thus a study of f inancia l perform-

ance of these Corporations assumes importance.

2.98 ADVANTAGES OF BUS TWSPORT

"Over the years, road t ranspor t has acquired a

considerable importance a s a d i sc re t e economic a c t i v i t y

with huge growth poten t ia l . Its share i n t r a f f i c

vis-a-vis t h e Railways has increased from 11 per

cent i n 1950-51 t o 32 per cen t i n 1977-78 i n respec t

of f r e i g h t t r a f f i c and £ran 25 per cen t i n 1950-51

t o 59 p e r cen t i n 1977-78 i n respec t of passenger

trafficma'

With t h e advancement of science and techno-

logy, the mobil i ty of people has very much increased.

The main function of t h e motor bus t r a n s p o r t i s t o

provide t h i s f a c i l i t y t o t h e public. The movement of

passengers by bus t r a n s p o r t se rv ices may be f o r a

v a r i e t y of purposes, viz., service, education, shopp-

ing, sight-seeing, etc., Thus the bus t ranspor t plays

a very important r o l e i n t h e day-to-day rou t ine of our

lives.

Motor bus t ranspor t , " the de f a c t 0 baruneter

of econanic, s o c i a l and commercial progress has

t r a n s f e r r e d the e n t i r e world i n t o one organised u n i w .

I t c a r r i e s ideas and inventions t o the people and has

considerably contr ibuted t o t h e evolution of c i v i l i -

sation.?' Though the demand f o r motor bus t ranspor t

i s fundamental i n human nature, it is an indispensable

p a r t of c u l t u r e a s the hallmark of c i v i l i s a t i ~ n . ~ ~

Econmic and CCimerCial importance of the greates t

magnitude i s , now-a-days, attached t o the develop-

ment of motor bus transport. "The motor bus trans-

por t indust r ies which undertake nothing more than

the mere movement of persons and things from one

place t o another, have constituted one of the most

important a c t i v i t i e s of man i n every stage of advanced

civil is at ion^^^

Thus, the preceding discussion makes it

evident t h a t there should be an adequate and balanced

development of motor bus transport in the country as

a whole i n order t o ensure social, economic and p o l i t i -

c a l development. I f i t i s not achieved, not only the

society, but the country as a whole w i l l suffer. In

t h i s context, the responsibi l i ty of the Sta te Road

Transport Undertakings (SRTUs) i s much more accelerated

because of the two-fold reasons - f i r s t l y , the s ca t t e r -

ed and unorganised character of the pr ivate bus operators

and t h e i r subsequent i nab i l i t y t o bring i n any improve-

ment i n the bus services being rendered by them and

secondly, an ever increasing demand of Passengers

t r a f f i c t o bus transport , i.e., by above 2.5 per cent

per annm. In the end, it w i l l be worthwhile t o

quote, ... "given these character is t ics , it i s

reasonable t o expect t h a t road transport should

receive a p r i o r i t y treatment i n planning, fund a l l o t -

ment and disbursal , technological developnent and

in f r a s t ruc tu ra l support. However, these have not

been forthcoming as a planned e f fo r t . With the

r e s u l t t h a t the potent ia l of t h i s sec tor i s only

p a r t i a l l y r e a l i s e d . ~ ~ ~

Marshall, A., ' Industry and Trade', (1919), p. 423.

Chaudhary, S . K . , 'Lectures on Transport', Loyal Book Demt, Ludh'iyana. 1967, p. 170.

Bonvia, M.R., 'The Economics of Transport', 1954, p. 30.

Committee on Transport Policy and Co-ordination, Preliminary Report, p. 32.

Ibid., p. 31.

Chaudhary, s.K., a,=., p. 172.

Road TransDort S t a t i s t i c s of India, Ministry of Transport and Shipping, Government of India, 1980-81 and CIRT, Pune.

Basic Road S t a t i s t i c s of India canpiled by CIRT, Pune, 1988-89.

Preliminary Report of the Cammittee on Transport Policy and Co-ordination, 1988, Appendix 9, p. 151 and CIRT, m e .

Performance of SRTUs i n India, 1988-89, p. 1, CIRT, Pune.

Report on the study group on the Road Transport co-operatives, 1983-84, Annexure IV, pp. 82-86 and CIRT, Pune.

Ibid., pp. 82-86.

13. Kulshrestha, D.K., Management of S t a t e Road Trans- p o r t i n India, New Delhi, 1989, p. 22.

14. Ibid., P. 23.

15. Performance of SRTUs i n India, 1988-89, Compiled by CIRT, Pune, p. 1.

16. Transport Department, Government of Tamil Nadu.

17. Robson, W.A., 'Nationalised Indust and Public ;y;pl, Allen & Unwin, Lzdon, 1960.

18. Sudarsanam, P., 'Bus Transport i n India ' , Ajanta Publicat ions ( Ind ia l , New Delhi, 1990, p.46.

19. moted i n Hanson, A.H., 'Managerial Problems i n Public Ente r i s e ' , Asia Publishing House, Bombay, 1*27.

20. The Economic Times,New Delhi, August 24, 1982.

21. Ogburn, W.F., The Social Ef for t s of Aviation, 1946, p. 11.

22. Prasad, A., ' Indian Railwavs', 1960, p. 4.

23 . Marshall, A., ' Industry and Trade', 1921, p. 23.

24. The Economic Times, New Delhi, August 24, 1982.