Karnataka transport corporations in limbo with PF dues mounting to Rs 2,792 crore, seek govt aid

Alluding to a sharp decline in ridership and revenue, rising fuel prices, and increased staff costs, Anbukumar wrote: “These factors have made it challenging for the corporations to cover daily operational costs, including fuel and wages, from their transport income. Consequently, remitting the due amounts to the PF Trust Board has become increasingly difficult, leading to a growing backlog of unpaid contributions and accumulating interest penalties.”

Under the Employees’ Provident Funds and Miscellaneous Provisions Act of 1952, employers are required to deduct 12 per cent of an employee’s basic salary and dearness allowance for PF. Employers must also make a matching contribution.

The total contributions from both the employee and employer must be deposited with the Employees’ Provident Fund Organisation (EPFO). If these contributions are not remitted on time, a late interest penalty of 12 per cent per annum will apply, as outlined in Section 7Q of the Act.

As of October 2024, the combined outstanding PF dues and interest from the four transport corporations — KSRTC, North Western Karnataka Road Transport Corporation (NWKRTC), Kalyana Karnataka Road Transport Corporation (KKRTC), and Bangalore Metropolitan Transport Corporation (BMTC) — amount to Rs 2,792.61 crore. This includes Rs 2,269.09 crore in unpaid PF contributions and Rs 523.52 crore in interest on delayed payments.

The NWKRTC is the most affected, having failed to pay PF dues for three consecutive years (from September 2021 to October 2024), resulting in dues of Rs 821.48 crore and Rs 232.9 crore in late payment interest.

The Regional Provident Fund Commissioner, Bengaluru, has also raised strong objections to the substantial PF arrears accumulated by the transport corporations. The commissioner has indicated that actions may be initiated to revoke the PF exemptions currently granted to these corporations.

Such a move could not only inconvenience transport employees but also plunge the corporations into a deeper crisis, the letter noted.

Congress, BJP blame each other

Opposition leaders argue that the Congress’s Shakti Scheme, which offers free travel for women in government buses, has resulted in a severe financial crisis for the four transport corporations.

Since the scheme was implemented, over 300 crore women have benefited from travelling on state transport vehicles without fare, leading to the total zero-ticket value exceeding Rs 7,600 crore.

Additionally, the scheme has significantly increased the percentage of women passengers to 58.10 per cent.

However, Transport Minister Ramalinga Reddy blamed the previous BJP government for leaving behind a huge liability. Reddy said, “The BJP government left behind a liability of Rs 5,900 crore to the transport corporations, including outstanding payments for diesel, EPF, and procurement of materials. We had to take responsibility for clearing all these dues and managing the corporations During the Covid-19 period, due to the suspension of bus operations, the government paid only net salaries to the transport employees but failed to pay the amounts deducted from the salaries such as PF, LIC, gratuity, and other contributions to the transport corporations.”

He also pointed out that at the end of the Congress regime in May 2018, the outstanding PF amount across the four transport corporations was only Rs 13 crore. However, by May 2023, at the end of BJP’s tenure, Reddy claimed, the outstanding PF amount was Rs 1,380 crore.

“In January 2020, the BJP government failed to implement the salary hike for employees, leading to a 15-day transport strike that left the state’s public without bus services. In March 2023, they announced a salary hike after 38 38-month delay, and they did not provide the arrears for these 38 months. The funds required to settle these arrears were not allocated, and employees were unpaid. While they claimed that transport corporations were making profits, they didn’t understand the profit/loss and revenue/expenditure,” said Reddy, assuring that the dues would be cleared as soon as possible.