Ball in KCR’s court on tariff hike
The Telangana State Road Transport Corporation (TSRTC) and the two power distribution companies (DISCOMS) in the state have one thing in common: They are incurring heavy losses year after year. The state government allows them to languish as any decision to either increase the power tariff or bus fares might result in a political backlash against the ruling TRS. Now, with the two millstones having become too heavy, the state government is reluctantly trying to hike fares and tariffs.
The DISCOMS have already submitted the aggregate revenue requirements to the Telangana State Electricity Regulatory Commission (TSERC) for 2021–22 and 2022–23, while the total revenue gap for the same period is estimated to be Rs 21,552 crore. The present mess can be attributed to the decision of not raising tariffs in the last six years. Even now, the DISCOMS are walking on eggshells when it comes to increasing them. It is possible that for the next financial year they would hike tariffs to net Rs 2,000–`4,000 crore. The lump sum hike might upset people, which the government can ill afford as the next Assembly polls are due in 2023.
When it comes to the TSRTC, the cumulative loss for the last three years is Rs 4,260 crore. The mess is partly the management’s own making as it had never bothered to improve its internal efficiency while other factors like Covid-19 and the 52-day strike by employees in 2019 too played a role. Now, the TSRTC has sent proposals to the government for hiking fares by 25 paise per km for Palle Velugu buses and 30 paise per km for other services to net `850 crore, which is just a drop in the bucket.
The two public sector undertakings cannot be brought back on the rails unless politically bold decisions are taken. The utilities need not earn profits but at least they should not slip into the quicksand of more losses. The TSERC had observed: “In order to bridge the revenue gap and strengthen the financial position of the DISCOMS there is a need to enhance the retail supply tariff.” The same is the case with the TSRTC too. Now the ball is in the CM’s court.