The Hindu Business Line : Assocham for privatisation of State transport

THE Associated Chambers of Commerce and Industry of India (Assocham) has mooted a proposal, suggesting to all the State Governments to give up the management control of their transport sector gradually and pass it on to the private sector.

In a representation submitted to the chief ministers and transport ministers of all the states and union territories, the Assocham President, Mr M.K. Sanghi, suggested that by transferring the existing management of State transport utilities to the corporate sector, its efficiency, productivity and quality and frequency will improve.

Secondly, according to the chamber, by shunning the current regulatory control over the State transport sector, their administration will save a great deal of revenue receipts as this sector erodes the State finances in a significant manner.

The chamber has pointed out that in majority of the Indian states, the public sector transport management does not add to the State's revenue generation. On the contrary, this sector is becoming a liability. According to official figures, the interest liability of all the states has risen phenomenally from Rs 9,000 crore to over Rs 55,000 crore in the last 10 years. Similarly, the debt burden of all the states put together has also grown drastically from Rs 2,43,000 crore in 1997 to over Rs 5,00,000 crore by the end of 2002. According to the chamber, the share of the state's subsidy in this is quite significant.

The chamber has stated that experience has shown that wherever private transport was introduced parallel to State-owned transport, both in terms of profitability and service frequencies, the private owners have taken a lead.

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Assocham for privatisation of State transport