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“A STUDY ON THE FINANCIAL CRISIS FACED BY

KERALA STATE ROAD TRANSPORT CORPORATION


WITH PERSPECTIVE TO CUSTOMERS”
A project report submitted to Amrita Vishwa Vidyapeetham in partial fulfilment
of the award of the degree of

Bachelor of Commerce

Submitted By
ABHISHEK VG (AM.AR.U3COM13008)
ADITYA VAISHNAV (AM.AR.U3COM13011)
NAVEEN (AM.AR.U3COM13055)
S ANEESH (AM.AR.U3COM13063)
Under The Guidance Of

Mrs .DURGALAKSHMI CV
Faculty

DEPARTMENT OF COMMERCE & MANAGEMENT

AMRITA VISHWA VIDYAPEETHAM

AMRITAPURI

MAY 2016

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ACKNOWLEDGEMENT

First of all we would like to present this piece of work at the Lotus feet of our Guru and
Guiding light Mata Amritanandamayi Devi who has been the source of inspiration for us
throughout the academic years and a guiding light.

This Project Report entitled “A STUDY ON THE FINANCIAL CRISIS FACED BY


KERALA STATE ROAD TRANSPORT CORPORATION WITH PERSPECTIVE TO
CUSTOMERS”

has been prepared by us and we have under taken this project survey under the supervision
of Mrs. .DURGALAKSHMI CV , Lecturer, Department of Commerce and Management,
Amrita School of Arts and Science, Kollam, during the 6 th semester.

We are immensely grateful to our guide Mrs. DURGALAKSHMI CV and to all our
faculties for their constant encouragement and guidance throughout this project period.

We also express our sincere thanks to Dr C GOPINATHAN PILLAI, Principal,


Amrita School of Arts and Science, Kollam and all other staffs of the college for their
valuable support towards the completion of this work.

We would like to take this opportunity to thank all my friends who have assisted us in
completing this work. Last, but certainly not the least, we are indebted to our Parents.
Without their blessings or grace, we couldn’t have finished this project under stipulated time.

ABHISHEK VG

ADITYA VAISHNAV

NAVEEN

S ANEESH

2
DECLARATION

We do hereby declare that this project work entitled “A STUDY ON THE


FINANCIAL CRISIS FACED BY KERALA STATE ROAD TRANSPORT
CORPORATION WITH PERSPECTIVE TO CUSTOMERS” submitted by us for the
partial fulfilment of the requirement for the award of Bachelor of Commerce (B.Com), is a
record of our own research work under the guidance of Mrs. DURGALAKSHMI CV,
Faculty, Dept. Of Commerce & Management. We certify that the project is our own work
and has not been submitted earlier for the award of any degree or diploma to any Institute or
University.

Place: ABHISHEK VG (AM.AR.U3COM13008)

ADITYA VAISHNAV (AM.AR.U3COM13011)

Date: NAVEEN (AM.AR.U3COM13055)

S ANEESH (AM.AR.U3COM13063)

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CERTIFICATE OF THE MENTOR

Mentor Name: DURGALAKSHMI CV

Designation: Lecturer

This is to certify that the report entitled “A STUDY ON THE FINANCIAL CRISIS
FACED BY KERALA STATE ROAD TRANSPORT CORPORATION WITH
PERSPECTIVE TO CUSTOMERS” has been prepared by Mr ABHISHEK VG, ADITYA
VAISHNAV, NAVEEN, and S.ANEESH under my supervision and guidance, for the
fulfilment of Bachelor of Commerce. Their field work is satisfactory.

Date: Signature of the Mentor:

4
INDEX
Sl No. Particulars Page No.

1 Executive Summary 6

2 Chapter 1 - Introduction 7

3 Introduction to the Study 8

4 Literature Review 9

5 Statement of the Problem 12

6 Objective of the Study 13

7 Scope of Study 14

8 Research Methodology 15

9 Limitations of the Study 16

10 Chapter 2 - Profile of the study 17

11 Chapter 3 - Theoretical Perspectives 19

12 Chapter 4 - Analysis and Interpretation 22

13 Chapter 5 - Findings Conclusion & Suggestions 38

14 Bibliography 43

15 Annexure 44

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EXECUTIVE SUMMARY

The Kerala State Road Transport Corporation (KSRTC) has a long and illustrious history that
precedes even the state of Kerala or India. KSRTC has been providing a constant and never
ending stream of controversy ever since the corporation sunk to its present state around the
beginnings of the 1990s. The reasons for why KSRTC is in such loss are many.

The main objective of the project was to find the reasons behind the financial crisis
of KSRTC from the point of view of customers. For collecting the information we used
questionnaire as the form of data collection and then personal interview was also conducted.
We discussed with people about their experiences with the customers and the points where
they want KSRTC to improve.

As Per the information collected from the customers, we have learned that there are
many reasons that’s in the mind of its customers that affect the financial stability of KSRTC.
Some of the problem includes Bus timing, different types of buses provided by KSRTC,
Remote area services of KSRTC, Services to customers themselves, management of KSRTC
etc. the customers think there should be increased and better services the respective areas.

According to our personal interview to different passengers, we’ve learned that the
customers have different point of views and the points that turned out same from most of the
people are as follows- Introducing new Volvo buses, improved online booking services and
booked seat reservation services, Logical staff specialization for long route travel,
pension/salary and efficient utilization of finance by diversification in business.

The first thing KSRTC should take care of its core business, long-distance services, the
second to run City and short distance services and the third for non-core operations like
infrastructure, parcel and cargo, body building and maintenance, land holdings management
etc., so that each can focus on different core operations. The present "all for one, one for all"
model might hold good for nostalgia but only encourages inefficiency.

KSRTC are among the lifelines of the country because they provide people with hassle free
traveling choices while also helping the country to save lots of $$$ in terms of oil bills and
help to reduce carbon emissions. KSRTC has to endure. But for that, it has to also get a
complete image makeover to appeal to our car-driving population and bring more people
back to KSRTC.

6
CHAPTER - 1
INTRODUCTION

7
1.1 INTRODUCTION TO THE STUDY

The Kerala State Road Transport Corporation (KSRTC) is the state-run bus company in
Kerala, India. It was established in 1965 under the provisions of Road Transport
corporation act 1950. It is one of the oldest state run public bus transport services in India
and is headquartered in Thiruvananthapuram

The corporation which has an income about ₹1900crore and expenses of about
₹2700crore, is one of the largest corporation in Kerala, which is suffering from such a
huge profit loss margin. The main objective of this project is to study about the reasons
of the same from the point of view of passengers.

The topic may be useful for study to get a clear understanding about the reasons behind
such financial conditions of KSRTC from the view point of passengers. This can be done
by studying the pie chart and column chart given throughout the project.

By this analysis of financial crisis of the corporation, it might be helpful for the
corporation to recheck the financial condition for the past years and to analyses what has
contributed most to the present situation so that it can help in taking preventive measures
for the future by finding solution for the problems that has faced during the last years. It
may also help the firm understand its position in terms of financial ratio etc. and to take
necessary remedial measures for improvement.

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1.2 LITERATURE REVIEW

KSRTC AND THEIR ISSUES – A STATUTORIAL OUTLOOK


Transportation is one of the main or primary facilities that should be provided by the nation
to the citizens. In Kerala, the Kerala state road transport corporation is facing several issues
including financial crisis for the past several years. The crisis is mainly the result of improper
timing, mismanagement, lack of timely maintenance of buses and introduction of pension
with Government to the employees of Kerala State Road Transport Corporation in the year
1984. The monthly payment is to the tune of Rs.50crores. Meeting this non-operating
expenditure from the interval revenue stream had resulted in huge commercial borrowing, the
payment of which is also about Rs.50crores per month. The other major issues are explained
below:

HUMAN RESOURCE ISSUES

 The depots are considered to be the profit centers of Kerala State Road Transport
Corporation. The assistant transport officer/district transport officer heading the
depots is not having any administrative experience. Nor they have any business
acumen. They are directly promoted from the category of inspectors whose job profile
does not include administration. There is need to have competent and qualified
officers at this level.

 The corporation which has an income about 1900crore and expenses of about Rs
2700crores does not have chartered accountant. This is also a serious issue to be
addressed.

 There is no well-organized training division in Kerala State Road Transport


Corporation. Neither has it got a research wing to pursue innovation.

 The number of crew per buses is high compared to other state transport undertaking.
It is about 7.8 in Kerala State Road Transport Corporation. It is necessary to bring it
down to 6.5.

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POLICY ISSUES

 No compensation has been provided to Kerala State Road Transport Corporation for
concession provided by Government to physically challenged, cancer patients,
freedom fighters, journalists etc.

 No other state transport undertakings in India pays pension at par with Government.
In some state transport undertakings, limited pension is provided by setting up
separate fund and not from normal revenue stream.

 New schedules are sanctioned without much study and under pressure from various
sources and yielding to lobbies. This affects financial viability of schedules.

OPERATIONAL ISSUES

 The corporation has about 6389 schedules with around 18lakhs kilometers per day.
Out of this only 27% is in fast passenger and above category. It should be at least
50% in order to ensure financial viability.

 No rationalization of routes and no scientific study before sanctioning a route.

 Low capacity utilization in nationalized sector which resulted in increased illegal


private parallel service operations.

 Unwanted competition with private sector resulting off in low income.

 There are several services which operate to isolated areas and many services at odd
hours i.e. during late nights and early hours on public demand. In most of the cases
these services are at loss. But the expenses on account of these social commitments
have not been compensated by Government.

 Over the period of last 5 years ticket checking has seen reduced in field due to
entrusting several other less important responsibilities to ticket checking inspectors
i.e. Entrusting more office jobs, enquiries, petition enquiries etc. this due to revenue
leakage .

 Punctuality and regularity in services are not kept due to various reasons.

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TECHNOLOGY ISSUES

 The total computerization is in slow progress. main reasons are lack of qualified
personnel’s at key positions especially at depot level, lack of specialization at head
office level to provide required policy/technical support except at EDP centers ,
resistance to chance at higher level etc. .

 The operations can be streamlined only through technology intervention. GPRS


enabled electronic ticketing machines (ETM’s) have been introduced. GPS has to be
introduced in all buses to improve efficiency and provide passenger information.

 Corporation has got technical talents at various levels. But no focused leadership to
promote this. No systems to promote research or innovation. recently internal talents
has developed a “ speed arrester “ device which cost less than 1/10th of normal
price of what is available in market and this can be patented . But there is no
qualified man power to pursue these kinds of things.

 KMPL (kilometer per liter) improvement is another area to be addressed. Driving


behavior has to do a lot with this. Constant training / counseling is needed for this.

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1.3 STATEMENT OF THE PROBLEM

This particular topic is chosen because Kerala State Road Transport Corporation is one of the
highly successful corporations in Kerala which is focused in road transportation services.
KSRTC started at 1938 and in the past 77 years it has bloomed and now runs in almost all
part of Kerala.

In the past year KSRTC is having a profit of 1900crore whereas loss of more than 2200crore.
A quick look at the figures and comparisons of the huge institution, K.S.R.T.C will show the
fact that K.S.R.T.C is one of the most essential institutions that constitute a major share in the
financial market of the state. At Present the corporation has 6389 schedules and 6241 buses.
The average earnings per kilometer work out to be around rs34.89 and the average earning
per buses works out to rs11518.

The main reason of financial crisis is very difficult to be analyzed because it is distributed in
different issues such as bus timing, Remote area services, Long distance travel services,
Salary and pension to employees etc. and our main objective is to find the reasons of
financial crisis of KSRTC from the point of view of Customers. Every piece data that has
been collected is directly collected from the customers from the KSRTC bus stands from
different parts in Kerala

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1.4 OBJECTIVES OF THE STUDY

1.4.1 Primary Objective


Our main objective is to find the reason for financial crisis faced by Kerala State Road
Transport Corporation (KSRTC). KSRTC, having an income of over 1900crore per year but
having expenses of more than 2200crore per year. Our objective is to find the reason for such
High expense, from the point of view of users as well as from the point of view of
Employees. We are also looking in detail regarding the causes of such expenses such as
pension policies for employees, diesel hikes, technological and operational issues, and service
from KSRTC etc.

1.4.2 Secondary Objective


. As a part of secondary objective, we tried to know the customers point of view regarding
the services such as customers point of view regarding the timing schedule, Different types of
buses issued this year, Management of KSRTC, their view about these financial crisis and
their personal recommendation for the same.

The questionnaire was made in such a format that could reveal their idea regarding the
financial crisis and personal interview was followed after that with the customers too

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1.5 SCOPE OF THE STUDY

The Kerala state road transport corporation is facing severe financial crisis for the past many
years. A fundamental assumption is that if a given producer (KSRTC) is capable of
producing Y units of output with X inputs, then the unit of output produced (Y) should be
greater than the input (X). Here the main input is money invested to KSRTC and the amount
of output produced is money itself (mainly). As per the records KSRTC is at a financial crisis
because the input money seems much higher than the output itself. The crisis is mainly the
result of Introduction of the pension scheme at par with the government to the employees at
Kerala state road transport corporation in the year 1984 There are many other reasons such as
No compensation on concession provided by Government to physically challenged, cancer
patients, freedom fighters, journalists etc. Schedules of buses of KSRTC, Types of buses,
Services of KSRTC etc. and the main scope of the project is to understand everything from
the point of view of customers and prove the KSRTC performance worthiness for the society
and for themselves.

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1.6 RESEARCH METHODOLOGY

Research Plan:
Research Approach: SURVEY METHOD

Primary Data:
Primary data consists of original information gathered for specific purpose. The primary data
is collected through questionnaire. The questionnaire is the common instrument collecting
primary information. We collected the data from KSRTC Bus Stands.

Research Instrument:
The research instrument used for collecting the primary data were the questionnaire. The
questionnaire was carefully developed, tested and debugged before they were administered
on a large scale. The questions presented are exactly same wording and in the same order to
all the respondents. The questionnaire consist of 15 questions.

Sampling Procedure
Sample Unit : KSRTC Bus Stands (Karunagapally, Kayamkulam, Alappuzha)

Sample Size : 100 Respondents

Sampling Method : Simple Random Sampling Method

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1.7 LIMITATIONS OF THE STUDY

Availability of Data

Some of the passengers were not in favour of us for participating the survey as they have no
time in filling the questionnaire. Non-willingness of the respondents to answer the
questionnaire was also a hurdle.

Reliability of Data

Reliability of data always remains a prime concern when humans are surveyed. Noninterest,
Poor understanding, unclear questions and Inability to think instantly creeps in
apprehensiveness in the minds of the researcher while tabulating and analysing the data.

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CHAPTER - 2
PROFILE OF THE STUDY

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PROFILE OF THE STUDY
The Kerala State Road Transport Corporation (KSRTC) is the state-run bus company
in Kerala, India. It is one of the oldest state run public bus transport services in India and is
headquartered in Thiruvananthapuram

The history of Kerala State Road Transport Corporation began whilst the development of the
transport industry it wasn't booming enough like today. The Travancore State Transport
Department was constituted by the erstwhile Travancore Government with a view to
reorganize the transport service of the State. Mr E.G. Salter, Assistant, and Operating Supdt
of London Passenger Transport Board were appointed as Supdt on 20.9.1937.

The State Motor Service was inaugurated by His Highness Sree Chithirathirunal on
20.2.1938. His Highness and his kin were the first passengers of the inauguration trip and Mr.
Salter was himself the driver to that bus. This bus along with the 33 other buses brought on
road driving through the Kawdiar Square was seen to be a beautiful attraction.

Consequent on the enactment of Road Transports Corporation Act in 1950, Govt. of Kerala
formulated KSRTC rules in 1965 by sec.44 and the department was converted into an
autonomous corporation on 1.4.1965. The Kerala State road Transport Corporation was
established by the government of Kerala by the notification dated, 15-3-1965. The
arrangements required for the smooth taking over of the services run by the Kerala State
Transport Department were made expeditiously by the Corporation. The corporation now has
a fleet of 6609 buses and 6389 schedules.

The project titled “A STUDY ON THE FINANCIAL CRISIS FACED BY KERALA


STATE ROAD TRANSPORT CORPORATION WITH PERSPECTIVE TO
CUSTOMERS” has been conducted to analyse the financial crisis of the corporation, to
study the problems & to suggest remedial measures.

Financial policies are taken with a view to overcome the financial crisis. These statements or
a report depicts the performance of the corporation for a certain period. To analyse the
profitability& expenses of the corporation over a period of past few years. On the basis of
information in these reports one can review the progress attained & decide upon the course of
action to be taken for the future.

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CHAPTER - 3
THEORETICAL PERSPECTIVES

19
THEORETICAL PERSPECTIVES
KSRTC has been providing a constant and never ending stream of controversy ever since the
corporation sunk to its present state around the beginnings of the 1950s after it was owned by
Kerala Govt. The reasons for why KSRTC is in such loss are many, all of which are well
known: politicians meddling in its running, mountains of freebies and concessions, pension
pay-outs, sometimes lethargic staff, corrupt, unqualified and indifferent management, huge
lack of visionary political will thanks to vested interests and mind-numbing inefficiency in
running services, all very typical of Kerala. KSRTC: painting over dented surfaces,
hammering metal strips over body gaps and hold cracked windshields in place using clamps
etc., and has been using the same strategy to survive its crises, ask the government for
bailouts and live hand-to-mouth off the earnings brought in by its super-class services while
bleeding everywhere else. Kerala's politicians however, are least bothered about all this.
However, it now has come to a stage where none of this will work anymore, and serious steps
have to be taken to stem the rot. The strategy to save KSRTC has to be twofold and very
simple. Cut costs and increase revenue. If KSRTC is well known and good at anything, it is
for its speed and highly aggressive driving style, for which it has equal number of fans and
detractors. The Superfast are especially notorious in this regard.

The Great Pension Scheme

KSRTC loses the most money not on its buses but on payment of pension to its employees.
When it comes to cut-and-dry finances, it is the blinking red light of warning on its balance
sheet and is the actual drain on the company. KSRTC is the only SRTC in the country which
pays its employee’s pension at par with any other government department. This started in
1984 and KSRTC was in loss some years later, from where it never recovered. KSRTC's
expenditure on pensions is around ₹.40crore per month and ₹ 480crore per year or 17% of all
Expenditure and more than 60% of its deficit today. Factoring in how pensions have to be
handled constitutes the cornerstone on reviving KSRTC. No, stopping pensions is not an
option but stupidity. The KSRTC revival package addresses this as the most important factor
on how to save the corporation

 Employees joining after March 31 2013 will join the new (contributory) Pension
scheme of the Government of Kerala.
 For existing employees, KSRTC will set up a Pension Trust Fund with LIC to service
pensions
 The government will provide a seeding corpus fund of ₹ 500crores to the trust
 Thereon every year the government and LIC will make a fixed contribution to the
fund (₹ 240crore each)
 The pension trust fund will pay employees the pension from a fixed date in the future
 KSRTC is already relieved from paying pension to its new employees and in around
10 years it will be completely relieved from paying pensions at all.

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The City/Ordinary Short Distance Service Business

KSRTC is known and loved for its epic long-distance services, the legendary Superfast and
Super Express blitzkriegs. On the other hand, its ordinary services are loved as much as a
hole in the head. Ordinary services constitute a whopping 80% of KSRTC's services while
bringing in only 26% of its revenue. However, that is not the only reason. Ordinary service
business is what is bogging KSRTC down, thanks to mainly its outdated policy on
how buses should be procured for Ordinary services.

A KSRTC bus starts its life as a shining Fast Passenger, Superfast or Super Express bus. It
runs in that form for some 5 years by which half of its life would have been sucked out of it.
Then it will be downgraded to a run as a service class two levels below for a couple of years,
after which it will be rebuilt and condemned to run as an "ordinary" service or a Trivandrum
city bus. This policy has to be flushed down the toilet. Ordinary buses are a liability to
KSRTC because they usually are around 7-12 years old and having used up their useful years,
run up huge maintenance and fuel bills while generating revenues never at par. This policy is
flawed for more than this one reason.

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Chapter - 4
ANALYSIS & INTERPRETATION

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1. How often do you use KSRTC?

In % In No.
Daily 23% 23
Weekly 59% 59
Occasionally 18% 18

Respondants

Daily
Weekly
Occasionally

Among 100 people about 59% from our survey responds that they use KSRTC weekly as the
services are available all the time without any proper timing. And about 23% of people use
KSRTC daily which were students, as government provides concession for students. And
about 18% were using KSRTC occasionally which depends on their situation.

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2. Are you satisfied with the service rate of KSRTC?

In % In No.
Yes 89% 89
No 11% 11

Respondents
100
90
80
70
60
50
Respondents
40
30
20
10
0
Yes No

As shown in the above graph, most of them are satisfied with the service rate provided by
KSRTC and only a few people are dissatisfied with it. Most of them say that they are not
much satisfied with the timing provided than the service rate and also the rash and careless
driving by the drivers. About 89 % are completely satisfied with the service rate.

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3. What type of buses do you think KSRTC needs?

In % In No.
Luxury 22% 22
Superfast 51% 51
Ordinary 27% 27

Respondents

60

50

40

Respondents
30

20

10

0
Luxury Super Fast Ordinary

As shown in the above graph most of them support that KSRTC needs more super-fast buses.
They complaints that the KSRTC lack super-fast buses to the long distances. Else they should
follow a proper timing in their services. As some of the people can’t afford luxury buses
towards the long distances, they prefer super fast buses towards long routes. And also about
27% responds that daily service of KSRTC lacks ordinary buses to the shortest distance as
some of the people depend on them. And about 22% respondents say that there is a lack of
luxury buses. And also they say that they are not properly maintaining their buses and they
are charging unaffordable rates towards shortest distances. If there is less number of booked
seats a day, they provide offer in their service rates on that day towards the destination.
Which attracts the passengers to choose those transportation than that of provided by the
government. KSRTC are not ready to provide offers in their service rates.

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4. Do you think KSRTC is providing their best services in remote areas?

In % In No.
Yes 53% 53
No 47% 47

Respondents
54
53
52
51
50
49
Respondents
48
47
46
45
44
Yes No

From the graph we can understand that 53% of the respondents or 53 respondents agree that
KSRTC is providing their best services in remote areas whereas 47 % of the respondents or
47 respondents disagree that KSRTC is providing their best services in remote areas.

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5. What do you think the reason for financial crisis faced by KSRTC?

In % In No.
Service Charge 15% 15
Improper Service Timing 61% 61
Bad Service 5% 5
Poor Condition Of Buses 19% 19

Respondents

Service Charge
Improper Timing
Bad Service
Poor Condition of Buses

One of the main reason for the financial crisis is the improper timing provided by the
KSRTC. Respondents say that they are not following a perfect schedule in their services.
Sometimes too many buses are provided by them to d same destination. If they manage their
timing in their transportation, it can help in improving their profitability. The second thing
they say that regarding the poor condition of the buses. As we all know people prefer their
safety first, many of the buses are not even having doors. Which people find it difficult?
From the study we found that about 61% says that the problem is with the improper timing.

27
6. Which Road Transportation Corporation would you prefer for Long Distance Travel(
State To State)

In % In No.
KSRTC 35% 35
Other Private Transport 65% 65

KSRTC
Other Private Transport

65% prefer private transport for long distance travelling while 35% prefer KSRTC for long
distance travel. This is because in long route services The Private Transport are providing
better facilities than KSRTC. So most of them prefer Private Transport for Long Distance
Travel

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7. Do you think the basic amenities provided by the KSRTC bus stands are hygienic and
can includes in the service provided by KSRTC?

In % In No.
Yes 6% 6
No 94% 94

Respondents

Yes
No

From the graph we can understand that 94 respondents or 94% of the respondents feel that the
basic amenities provided by the KSRTC are hygienic while 6 % feel that the KSRTC is not
providing hygienic amenities.

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8. Do you think the internal mismanagement is one of the reasons for financial crisis?

In % In No.
Yes 91% 91
No 9% 9

Respondents

Yes
No

As provided in the above graph 91% of respondents say that there internal mismanagement
and that is one of the reasons for the financial crisis. They say that they are misusing the
funds provided by the government for the development of KSRTC. Most of the funds
provided for KSRTC are diverted from its source and are not reaching the people. And also
no one is ready to take initiative for helping the KSRTC to overcome the financial crisis. As
not enough money is available for the development and maintenance, the companies who
provide the maintenance service to the buses are not ready to repair the buses.

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9. Which sector do you think is providing the best road services?

In % In No.
KSRTC 25% 25
Other State Bus Services 7% 7
Other Private Sector 68% 68
Transportation

Respondents

KSRTC
Other States Bus Services
Other Private Transport

68% feel that private sector is providing the best road services while 7 % feel that other state
bus services are providing the best service while 25% feel KSRTC is providing the best road
service

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10. Do You think One man Driver for Long Distance Travel (Ex-Trivandrum To
Bangalore) is Safe

In % In No.
Yes ,it’s Safe 6% 6
No, Number of Drivers 94% 94
Should be Increased.

Respondents

Yes
No

94% feel that one man is not enough for long distance travelling while 6% feel that one man
is enough during long distance travelling. As most of them reasoning that it won’t be as safe
if the bus is taken by a single driver to the long distance. There is absolutely a need of driver
cum conductor as it can avoid the chance of risk.

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11. Do you think that the government policies related to KSRTC services are reaching the
needy people?

In % In No.
Yes 49% 49
No 61% 61

Respondents

Yes
No

61% feel that the policies relating to KSRTC taken by government is not reaching the
needy people while 49% feel that it is reaching the needy people. As the funds provided for
KSRTC are misused, it is not at all reaching the needy people and also the funds are diverted
for many other useless activities and are looted by the authorities. If the funds are utilized
properly, it may reduce the chance of occurring crisis. And most of the respondents says that
the funds provided for the KSRTC are not enough for their existence.

33
12. Are you aware of services provided by KSRTC such as concession for Students etc.?

In % In No.
Yes 83% 17%
No 83 17

Respondents

Yes
No

About 83% are aware of the services provided by KSRTC. But still 17% of
respondents are not even aware about these facilities. Among these 100 people only about
40% are using these facilities. So they can either alter their current rules and policies
regarding concession to make it more useful or they can take away the current system and
bring any new systems which can be more beneficial for everyone.

34
13. Which Road Transport do you think provide better facilities during long Distance
Travel?

In % In No.
KSRTC 24% 24
Other Private Transport 76% 76

Respondents
80

70

60

50

40
Respondents
30

20

10

0
KSRTC Other Private Transport

About 76% of respondents prefer private sector services or long distance travelling than
public sector. They bring forward the reasons like the private travelling agencies provide both
driver cum conductors for long distances and also they provide facilities like free drinking
water, free WIFI , blanket etc . These types of services will be attractive for long distance
travelling. At the same time government travels such as GARUDA buses are not even
maintained properly and they don’t even provide safe drinking water in their buses. And also
the attitudes by the drivers towards passengers are too rough, they said.

35
14. Do you think the services provided by KSRTC like providing free WIFI will be
helpful as a part to overcome the financial crisis?

In % In No.
Yes , it will be beneficial for 32% 32
the future

No, It won’t be more 68% 68


attractive for the poor

Respondents

Yes
No

The services like free WIFI provided won’t be attractive for most of the people. They
expect services like providing basic amenities than providing free WIFI. Those who don’t
use a smart phone or a laptop won’t be feeling this as a good service

36
15. What do you think the best solution you suggest for curing the financial crisis?

In % In No.
Periodical maintenance of 40% 40
buses

Deduction in salary and 3% 3


pension

Proper timing in the service 11% 11

Change in the service rate 9% 9

All the above 37% 37

Respondents

Periodical maintenance of
buses
Deduction in salary and
pension
Proper timing in the service

Change in the service rate

All the above

40 % feel that the solution for financial crisis can be solved by periodical maintenance
of buses while 3 % say deduction in salary and pension while 11% say proper timing in the
service while 9% say change in the service rate while 37% say all of the above is the solution
for financial crisis. As the pollution arising out from the buses are affecting too much for the
other travellers and pedestrians , they pointed out that lack of proper maintenance of buses is
one main reason .and about 37% agrees that all the above reasons are a part of financial crisis
for KSRTC .

37
CHAPTER - 5
FINDINGS, CONCLUSION & SUGGESTIONS

38
5.1 FINDINGS
Cutting costs represents only one half of the strategy of making KSRTC viable, the other half
is to make more money, of course. Yes, KSRTC has the highest bus charges in south India
and also makes the most revenue per kilometer, but still, there are possibilities of lots more to
come in, without hurting anyone. Most of the measures given below may not be direct
revenue earners but they will prompt more people to board the buses which will translate into
more revenue which can be ploughed back for staff welfare.

 More Volvo’s- The first step in getting more people to board buses is to get more
buses that people want to board. For now, these could be interstate services, the
easiest and biggest money spinners any bus operator could wish for. Among the most
powerful people in the country today are the interstate private bus operators who
literally mint money through overpriced tickets between cities as trains are either
unavailable or too slow. All that money KSRTC should be making off its own people
is going into the pockets of the Kerala government or random private parties. The
Volvos issued in 2016 were a welcome start. There are literally tons of money to be
made from this sector, from people who are willing to spend it! If only KSRTC has
the will to fight against private operators!

 Digitization: KSRTC's current online ticket booking website looks like it is the same
one the Flintstones used to use. The "corporate" website is no better either. Seat
booking should be made available online for all super class services. All depots and
franchises (after appointment) should be networked for real-time online seat
reservation. But none of this will be any good without developing a new website! And
that should be followed to mobile ticket booking and display and apps.

 Rationalization of Services: Try catching a bus from Trissur or Palakkad bus stations
to Coimbatore after 10 at night. There will be at least 300 people in the station
keeping you company with the same goal in mind. Run services from railway stations
as and when trains arrive/depart. In short, KSRTC should run buses when and how
passengers require them the most and not when it suits the corporation.

 Staff Sensitization: conductors are not really required in Volvos that only two driver-
cum-conductors will do. Staff should be specialized only according to requirement. .

 Make Use of Assets: KSRTC is one of the biggest landowners in Kerala. Efficient
utilization of all this land can surely net a lot of benefits. If nothing, sell some of it
and use that money to power the pension fund. Lease/hire out buses for trips at half
the rate of private operators, make and sell merchandise, Model buses, t-shirts, mugs,
key-chains, stickers etc. can bring huge money inside. Especially with all those
tourists who just love souvenirs!

 Better Buses, Services and Infrastructure: Phase out current rattletraps and
introduce efficient, comfortable, silent and back-engine buses for long distance
services and low floor buses for city services. Work with international bus
manufacturers to come out with new models suited for Kerala (and rest of
India). Demolish current face of bus stations and build cleaner and more inviting
ones.

39
5.2 CONCLUSION

KSRTC cannot operate in the way it had been over the past 60 odd years anymore. The
"Single Behemoth Corporation" model is one of the past in this fast age of mobility, agility
and micro-management. KSRTC should be ruthlessly corporatized in line with the modern
corporation if it has to survive. Being a public corporation it is still fine if it does not function
for-profit, but some profit does not hurt, which of course should immediately be pushed back
should do is to split the corporation into at least three separate corporations or even better
into with their own CEOs and boards. The first (KSRTC) should take care of its core
business, long-distance services, the second to run City and short distance services and the
third for non-core operations like infrastructure, parcel and cargo, body building and
maintenance, land holdings management etc., so that each can focus on different core
operations. The present "all for one, one for all" model might hold good for nostalgia but only
encourages inefficiency. However, expect violent opposition from the leftists and unions on
this move.

KSRTC is a public service organization catering to the very basic of rights and need to the
citizens of this country, hence needs to be left alone from being used for populist political
games (just like the railways). It needs to be freed of its political clutches and needs to have a
properly "corporatized" ways of working with some business sense to ensure healthy balance
sheets to earn some profits while not losing sight of its social responsibilities, because the
corporation is also a vehicle of citizen service, providing mobility to all people across all
sections of society. Just like all transport companies around the world, public transportation
organizations like KSRTC are among the lifelines of the country because they provide people
with hassle free traveling choices while also helping the country to save lots of $$$ in terms
of oil bills and help to reduce carbon emissions. KSRTC has to endure. But for that, it has to
also get a complete image makeover to appeal to our car-driving population and bring more
people back to KSRTC...

This “Study on Financial crisis of KSRTC from the view point of customers” had helped us
in learning about the reasons behind the financial crisis. The Customers were kept as the main
source of information gathering. From the viewpoint of customers we have learned that the
KSRTC after issuing new buses and providing services to passengers have faced the financial
crisis because of lack of schedules bus timing, poor bus condition, long distance traveling
situation etc. For improving its service KSRTC should come up with new ideas regarding
how it can improve is services by computing proper time schedule with random buses so that
different customers can choose different buses as they are interested. KSRTC can avoid buses
if there is less passengers or if the buses are not required compared on the basis of
Employment days, school days, timing etc.

40
5.3 SUGGESTIONS

 Bus timing - From our study we analyzed that KSRTC although have issued many
new buses for its passengers, but there is no proper timing. In some of the place and
bus stands we visited, we learned that for a particular destination many KSRTC buses
are following same route and also in same time. There is a time lapse of more than 2
hours at same places. So, our first recommendation is that there should be particular
schedule for KSRTC buses to travel for a destination but with a particular fixed time
lapse taking in consideration on the working hour of employed people.

 Types of buses - From the questionnaire as well as from the direct interview we
learned that most people are considering superfast buses than luxury and ordinary
buses. Although KSRTC have introduced many versions of Volvo buses, this may
affect the ordinary people who are not capable of paying high ticket cost of luxury
buses. The thing KSRTC can do is that; it can control the time schedule. If the timing
of these different type of buses are in an ascending order with specific time lapse
which may help the passengers to choose the buses they need as they require.

 Remote Area Services - Although KSRTC is very much focused in service in remote
area, there are some places left where services are not that good because of which the
passengers are not satisfied. Remote areas mainly hilly areas such as Malapurram,
Munnar and other underdeveloped areas where KSRTC are not able to provide good
services. The people from these places or the people who have travelled to these
places, some are satisfied, some are not. KSRTC can improve its services by
improved buses to these places with experienced drivers.

 Improved Services to its customers - As per our interview to ordinary passengers,


we learned that the new buses provided by KSRTC after 1st Jan 2016 may have
improved the Goodwill of the corporation but the services have not much developed.
We learned that one of the main reasons of dissatisfaction of service is the rude
behavior of bus conductors. The rude behavior and sometime insult of the customers
leads them to shift to private buses from KSRTC buses. Customer respect should be
considered the main motive on the basis of services. The other service problems that
we learned is that the service charges of some buses are very high, mainly of limited
stop buses which charges ticket cost from 1 bus stand to another bus stand, no matter
where the customer gets in the bus. These Rules should be analyzed and proper
decisions have to be taken. Poor working condition of buses was a big reason of low
satisfaction of customers and KSRTC is taking proper decisions by bringing n new
buses this year.

41
 Management of KSRTC - There is a management structure inside KSRTC which is
actually not working as well as it is supposed to be. KSRTC has introduced many new
buses after January 1, 2016. As per the customers, there is a huge gap between the
funds asserted by the government for the buses and the actual cost of buses that are
actually brought. Most of the funds provided for KSRTC are diverted from its main
objective and is not reaching the customers. Customers are pointing the Management
for the mismanagement of funds. For improving this or to avoid such kind of
controversies, KSRTC can employee Auditors for the Auditing of the funds for
KSRTC.

 WIFI for Volvo - As per our research, Most of the Customers are not satisfied with
Volvo and its free Wi-Fi system because of consideration of poor people. As per the
Dream of Prime Minister Narendra Modi dream of digital India, focused on
development of internet world in India. The issue of free WIFI for Volvo buses could
be a huge stepping stone for the Dream Digital India and we support that.

 Salary and Pension - Since salary and pension are human beings main source of
living, minimizing these pension policies could not be a good idea. Instead of
minimizing the pension policies KSRTC can improve the service which can focus
more of travelers to travel in KSRTC which can balance the financial crisis.

 Long Distance Travel Services - Kerala State Road Transport Corporation has
already issued State to State Travelling buses mainly focused in high employment rate
cities like Bangalore, Coimbatore, Chennai, Mumbai etc. There are many buses
including AC and Non AC buses. As compared to private buses KSRTC is not
providing customers the services they expect after traveling from a private bus.
Private Agency Buses Provide good services, they even provide blankets for their
customers in case of bad climate but KSRTC is not doing the same. The other
complain that we heard from one of the passenger is that in case of customers or No
customers, buses of KSRTC are traveling from one main station to another main
station, which is one of the main reason for the financial crisis faced by KSRTC.
Another Customer discussed with us about the rule for long distance travel. As per
rule 2 drivers are supposed to be present in a bus in case of state to another state
transport .whereas they have not found the same in KSRTC buses.

42
BIBLIOGRAPHY

Websites
 KSRTC Blog (www.ksrtcblog.com)
 KSRTC Website (www.keralartc.com)
 Wikipedia (https://en.wikipedia.org/wiki/Kerala_State_Road_Transport_Corporation)

Articles from Newspaper


1. The Hindu (http://www.thehindu.com/news/national/kerala/financial-crisis- grips-
ksrtc-again/article5323159.ece)
2. Mathrubhumi (http://mathrubhuminews.in/ee/ReadMore/8832/finance-department-
holds-ksrtc-pension- fund/E)
3. Economic Times (http://articles.economictimes.indiatimes.com/2014-12-
19/news/57233575_1_cess-of-rs-cess-tax-ksrtc)
4. New Indian Express (http://www.newindianexpress.com/states/kerala/Idle-Buses-
Add-to-KSRTC%E2%80%99s-Financial-Woes/2014/08/31/article2407342.ece)

43
ANNEXURE

Questionnaire

1. How often do you use KSRTC?


a) Daily
b) Weekly
c) Occasionally

2. Are you satisfied with the service rate of KSRTC?


a) Yes
b) No

3. What type of buses do you think KSRTC needs?


a) Luxury
b) Ordinary
c) Super fast buses

4. Do you think KSRTC is providing their best services in remote areas?


a) Yes
b) No

5. What do you think is the reason for financial crisis faced by KSRTC?

a) Service charge
b) Improper service timing
c) Bad service
d) Poor condition of buses

6. Which Road Transport do you think provide better facilities during long Distance
Travel?

a) KSRTC (Kerala Road Transportation Corporation)


b) Other Private Transportation

44
7. Do you think the basic amenities provided by the KSRTC bus stands are hygienic and
can includes in the service provided by KSRTC?

a) Yes
b) No

8. Do you think the internal mismanagement is one of the reasons for financial crisis?
a) Yes
b) No

9. Which sector do you think providing their best in road way services?

a) KSRTC
b) Other State Bus Services
c) Other Private Sector Transportation

10. Do You think One man Driver for Long Distance Travel (state-to-state ) is Safe
a) Yes, It’s Safe
b) No, Number of Drivers Should is increased.

11. Do you think that the government policies related to KSRTC services are reaching the
needy people?
a) Yes
b) No

12. Are you aware of services provided by KSRTC such as concession for Students etc?
a) Yes
b) No

13. Which Road Transportation Corporation would you prefer for Long Distance Travel
(State To State)?
a) KSRTC(Kerala State Road Transportation Corporation)
b) Other Private Transportation

45
14. Do you think the services provided by KSRTC will be helpful as a part to overcome
the financial crisis?
a) Yes , it will be beneficial for the future
b) No, I won’t be more attractive for the poor

15. What do you think the best solution you suggest for curing the financial crisis?
a) Periodical maintenance of buses
b) Deduction in salary and pension
c) Proper timing in the service
d) Change in the service rate
e) All the above

46