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.