BENGALURU: The Karnataka government is likely to forgo its share of taxes on diesel for all four state-run road transport corporations (RTCs) to bail them out of their financial problems.
Sources said chief minister Basavaraj Bommai, during a meeting last week, asked finance officials to work out implications for the state exchequer if tax on diesel is waived. The direction came after RTCs expressed concern over rising fuel prices and sought a subsidy. "If at all it comes through, this is going to be a temporary measure till the financial health of these corporations improves," said a transport official.
At present, the four RTCs together spend a whopping Rs 11.5 crore daily to purchase around 13 lakh litres of diesel. They can save over Rs 1.5 crore a day if the state government waives its share of taxes.
The daily diesel payout would have been more than Rs 15 crore if RTCs went for bulk purchase, as there is a gap of almost Rs 35 a litre between retail and bulk prices. As a result, RTCs have been buying diesel from retailers recently.
All four RTCs have been operating under huge losses ever since the first wave of Covid-19 struck in 2020, so much so that they couldn't even pay their staff until the government stepped in. The steep rise in diesel prices since has made things worse, forcing them to seek help again.
"The government has been very helpful. It released over Rs 1,500 crore to all the RTCs put together to bail them out during the Covid crisis in the last two years," said NV Prasad, principal secretary, transport.
Realising the urgent need for addressing the financial needs of these corporations, whose collective losses are touching Rs 5,000 crore, the government has set up a panel under retired IAS officer MR Srinivas Murthy to suggest reforms to make the RTCs not only self-reliant but also profitable. The committee is expected to submit its report in a few weeks.
