“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 1
Transcript
“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 6th 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
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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.
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.
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CHAPTER - 1
INTRODUCTION
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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
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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% 23Weekly 59% 59Occasionally 18% 18
Respondants
DailyWeeklyOccasionally
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% 89No 11% 11
Yes No0
10
20
30
40
50
60
70
80
90
100
Respondents
Respondents
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% 22Superfast 51% 51Ordinary 27% 27
Luxury Super Fast Ordinary0
10
20
30
40
50
60
Respondents
Respondents
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% 53No 47% 47
Yes No44
45
46
47
48
49
50
51
52
53
54
Respondents
Respondents
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% 15Improper Service Timing 61% 61Bad Service 5% 5Poor Condition Of Buses 19% 19
Respondents
Service ChargeImproper TimingBad ServicePoor 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.
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6. Which Road Transportation Corporation would you prefer for Long Distance Travel( State To State)
In % In No.KSRTC 35% 35Other Private Transport 65% 65
KSRTCOther 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% 6No 94% 94
Respondents
YesNo
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% 91No 9% 9
Respondents
YesNo
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% 25Other State Bus Services 7% 7Other Private Sector Transportation
68% 68
Respondents
KSRTCOther States Bus ServicesOther 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% 6No, Number of Drivers Should be Increased.
94% 94
Respondents
YesNo
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% 49No 61% 61
Respondents
YesNo
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.
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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
YesNo
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.
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13. Which Road Transport do you think provide better facilities during long Distance Travel?
In % In No.KSRTC 24% 24Other Private Transport 76% 76
KSRTC Other Private Transport0
10
20
30
40
50
60
70
80
Respondents
Respondents
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.
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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 the future
32% 32
No, It won’t be more attractive for the poor
68% 68
Respondents
YesNo
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
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15. What do you think the best solution you suggest for curing the financial crisis?
In % In No.Periodical maintenance of buses
40% 40
Deduction in salary and pension
3% 3
Proper timing in the service 11% 11
Change in the service rate 9% 9
All the above 37% 37
Respondents
Periodical maintenance of busesDeduction in salary and pensionProper timing in the serviceChange 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 .
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CHAPTER - 5
FINDINGS, CONCLUSION & SUGGESTIONS
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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.
5.2 CONCLUSION
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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.
5.3 SUGGESTIONS
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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.
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
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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.
BIBLIOGRAPHY
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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)
1. How often do you use KSRTC?a) Dailyb) Weeklyc) 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) Luxuryb) Ordinaryc) 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 timingc) Bad serviced) 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
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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?
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 Servicesc) Other Private Sector Transportation
10. Do You think One man Driver for Long Distance Travel (state-to-state ) is Safe a) Yes, It’s Safeb) 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) Yesb) 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
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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 futureb) 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 busesb) Deduction in salary and pensionc) Proper timing in the serviced) Change in the service ratee) All the above
