ENTITLED

-BY
DR JIWANJHUNJHUNWALA
LECTURER IN COMMERCE
CHRIST COLLEGE
CUTTACK.

1
 1)Public road transport is a major component
in economic development of a country.
2)Public road transport is popular because of:-
 Easy availability/accessibility,
 Flexibility of operations,
 Adaptability to individual needs,
 Economic,
 Higher frequency and
 Reliability.
3)STU’s are public(govt.) owned organization
whose prosperity is at the cost of public/state.

2
 STU’s

Corporation Municipal
Company Set Up Undertaking
Set up (OSRTC, Since
(Chandrika in
1974)
(ORT, Cuttack & BEST in
Berhampur) Mumbai)

Governmental
Departmental
Set Up
(State transport
service, Cuttack before
1974)
3
APSRTC KSRTC RSRTC
ASRTC MPRSRTC SBSTC
BSRTC MPSRTC TRPTC
CSTC MSRTC UPSRTC
DTC MTC
GSRTC NBSTC
HRTC NWKNSRTC
J&KSRTC OSRTC
KNSRTC PRTC
4
 “REVIEW OF LITERATURE”
1. In 1975, Keeler did a comparison on cost of automobiles, bus
and rail.
2. In 1975, Sastry did an inter-relationship comparison between
physical and financial performance of eleven STUs.
3. In 1982, Mahesh Chand reviewed the financial performance of
twenty-five transport undertakings of one year only.
4. In 1982, D. Pandu Ranga Rao did a multiple study on transport
network of Vishakapatnam.
5. In 1986, Murthy studied the seasonal changes in the parameters
that determine cost and revenue.
6. In 1986, Patankar dealt with economic, sociological, financial
and technical aspects of passenger road transport.
7. In 1992, Mark Henson studied the social costs of roadways.
continued…. 5
8. In 1992, Mohanty studied a system approach to bus
transportation.
9. In 1992, Venkata Narayan analyzed MIS by considering
depots as a profit centre.
10. In 1993, Peter Miller and John Moffet attempted to
quantify total costs for automobiles, buses, and rail
transport in the U.S.
11. In 1994, Pathak made an inter-STU comparison.
12. In 1995,John Poorman’s study describes a Least Cost
framework and model, with performance measures and
Monetized costs for evaluating transport investments and
policies, and comparing various modes.
13. In 1997, Patrik developed cost estimates for investment
alternatives. continued….
6
14. In 2000, Thomas studied economic, financial and technical
aspects of STUs.
15. In 2001, ICF Consulting, Freight Benefit/Cost Study
includes a review of freight transport costing and describes
a comprehensive analysis tool that can capture the full
benefits and costs of freight transportation improvements.
16. In 2003, Transport Canada studied on Investigation of the
Full Costs of Transportation.
17. In 2004, Emile Quinet analyzes the methodologies and
compares the results using regression analysis.
18. In 2005, Mohanty evaluated the performance of OSRTC.
19. In 2008, Michal evaluated truck and rail transport social
costs.
20. In 2008, M. Maibach, study provides a comprehensive
overview of approaches for estimation and internalization
of external cost. 7
“SIGNIFICANCE OF THE STUDY”
1. This study would provide an up to date report on
the performance of State Road Transport
Corporations.
2. It would propose suitable remedial packages for
improvement in its performance.
3. The use of statistical techniques will help in the
formation of prospective policy packages.
4. This study will help in cost reduction and
enhancing profitability techniques.
5. This study will highlight major problem areas
requiring the attention of management and
Government. 8
 “OBJECTIVES”
1. To analyze the physical and operational performance of State
Road Transport Corporations &
To analyze the cost structure, cost revenue relationships and
the overall financial performance of State Road Transport
Corporations.
2. To analyze the incidence of tax burden and its impact on the
profitability of State Road Transport Corporations.
3. To analyze the organizational efficiency by studying the inter-
relationships between physical performance and financial
performance of State Road Transport Corporations.
4. To trace out the reasons of detoriation in public sector
transport specifically STUs and
5. To suggest feasible ways and means to tone up the levels of
performance of State Road Transport Corporations. 9
 “HYPOTHESIS”
1. The profitability of State Road Transport Corporations is low
because of higher cost of personnel, fuel and other operational
costs.
2. The operational efficiency of State Road Transport Corporations is
low due to low utilization of vehicles and high marginal costs.
3. Fixed costs are high in State Road Transport Corporations in
which cost of interest, taxes and personnel play a major role.
4. Kilometer per litre is higher( low milage) in many State Road
Transport Corporations.
5. The schedule/staff ratio is also higher in many State Road
Transport Corporations and the overhead expenditure per
employee is higher in many State Road Transport Corporations.
6. The under occupation ratio affects the earnings in many of the
State Road Transport Corporations.

10
 “SCOPE”
1. To highlight the performances of
twenty-two State Road Transport
Corporations.
2. The period of study is from the
post liberalized era, i.e., 1991-92
and onwards.
3. Application of selected statistical
techniques.
11
 “METHODOLOGY”
1. Use of cross-section and time series data.
2. Survey of all available literature.
3. Collection of secondary data and presentation according to specific
characteristics.
4. Use of the following statistical techniques:-
a) Correlation analysis
b) Regression analysis
c) Significance test criterion
d) Analysis of variance
e) Standard error of the mean
f) Student T-Test
g) F-Test
h) Durbin Watson test
i) Bi-variate analysis
j) Linear trend analysis
k) Standard deviation
12
l)Sum of squares.
 “ STATISTICAL TECHINIQUES”
1. Correlation analysis- is used to derive precisely the degree
and direction of relationship between the variables.
2. Regression analysis- is used to measure the effect of the
independent variable on dependent variable.
3. Significance test criterion- is used to test the significance
of each table values and retain those which are highly
significant.
4. Analysis of variance- is used to determine whether the
difference in the mean values of different samples is due to
chance or due to any significant cause.
5. Standard error of the mean- is used to study the
distribution of sample mean and standard deviation.
6. Student T-Test- is used for testing the hypothesis or the
significance of differences. continued…. 13
7. F-Test- is used to find out the difference between the
observed value and the estimated value of a ratio of certain
variance.
8. Durbin Watson test- is used to test the correlation between
successive values in the residuals of a regression analysis.
9. Bi-variate analysis- is used to test hypothesis of association
and causality.
10. Linear trend analysis- is used to test the different aspects of
the variables.
11. Standard deviation- is used to make a study of the
variables and their stability.
12. Sum of squares- is used to find out the relative size of the
variance caused by unexplained variance.

14
 “PHYSICAL AND OPERATIONAL
PERFORMANCES”
1. Fleet strength- total number of buses held by the
organization. An increase shows the increase in the ability
of the organization to provide services.
2. Fleet utilization (%) - a higher percentage indicates better
utilization with low cancellation of services and
breakdowns. Fleet utilization (%) = [number of vehicles on
road * 100] / fleet strength.
3. Bus utilization per bus on road per day (kms) - a bus which
performs effective km. Higher indicates increase in
revenue.
4. Bus utilization per bus held per day (kms) –it tells about
productivity. Bus utilization per bus held per day (kms) =
average kms per day/ average buses held per day.
continued…. 15
5. Breakdown per 10,000 eff. Kms- it indicates stoppage of
bus due to mechanical defects or other failures. Lower the
better. Breakdown per 10,000 eff. Kms = [total number of
breakdowns * 10,000] /total effective kms.
6. Accidents per 100000 eff. Kms – lower the better.
Accidents per 100000 eff. Kms = [total number of
accidents *100000] / total effective kms.
7. Earnings (paisa/km) - higher the better. Earnings
(paisa/km) = total earnings/ total effective kms.
8. Load factor- indicates the occupancy level of passengers in
a bus. Higher the better. Load factor passenger km =
revenue/fare per km.
9. Total cost (paisa/km) - it includes operating and non-
operating costs. Lower the better. Continued…..
16
10.Profit/loss (paisa/km) – to know the real
revenue generated. Higher the better.
11.Fuel consumption (km/litre) – lower the better.
Fuel consumption (km/liter) = total kms
covered/total liters’ consumed.
12.Cost of diesel (paisa/km) - it increases the
operational cost. Lower the better.
13.Bus staff ratio per bus on road – it indicates
higher staff productivity. Bus staff ratio per bus
on road = total staff/ total number of buses.
continued….
17
14.Cost of personnel (paisa/km) – can be reduced by
minimizing staff. Lower the better.
15.Cost of spare parts (paisa/km) – depends upon age
of fleets, road condition etc. lower the better.
16.Cost of tyres and tubes (paisa/km) - lower the
better. Cost of tyres and tubes (paisa/km) = total
changes/ total effective kms.
17.Taxes (paisa/km) - lower the better. Varies from one
place to another.
18.Interest (paisa/km) – lower the better. No outside
source of capital.
18
 “FINANCIAL PERFORMANCES”
1. Correlation – is used to measure the relationship between
the dependant variable i.e. profit and independent variables
i.e. other factors.
2. Coefficient of determination – is used to find out the ratio
of explained variation to total variation and the remaining
for the other factors.
3. Standard error of estimates – is used to determine the limits
within which a factor will lie.
4. Chi-square test – is used to test the variance and
independence of the factors.
5. Durbin-Watson test – is used to study the sequential
relationship among the variables.
6. Test of significance – is used to study the effect of
independent variables on the profits. 19
 “WORKING CAPITAL”
1. Working capital is used to measure efficiency.
2. Working capital is used to study the short term financial
health.
3. Working capital = current assets – current liabilities.
4. Working capital ensures that a company has sufficient cash
flow in order to meet its short term debt obligations and
operating expenses.
5. T –test is used to find out the upper and lower limits at 95
% confidence interval.
6. The standard norm for current ratio is 2:1 but 1:1 is
manageable in some cases.
7. Current ratio is used to see if the organization has enough
current assets to pay off its current liabilities.
20
 “FINDINGS”
1. The public sector passenger transport sector in this country
is facing a serious crisis today.
2. It’s high time to take effective and timely measures.
3. STUs are losing their prime position in the passenger
transport sector.
4. The failure of STUs in India is not a sudden development
but the one that has been emerging over the last decade.
5. In the economic liberalization Policy of the Indian
Government, there appears to be no political will for
further expansion of bus services.
6. Lack of adequate working capital would result to
bankruptcy.

21
 “OBJECTIVES*/HYPOTHESIS**/FINDINGS***”
1. *To analyze the physical and operational performance of State
Road Transport Corporations.
**The physical and operational performance of state road
transport corporations is not satisfactory.
***The failure of STUs in India is not a sudden development
but has been emerging over the last decade due to improper
physical and financial performance.
2. *To analyze the cost structure, cost revenue relationships and
the overall financial performance of State Road Transport
Corporations.
**Revenue is always less than the cost and fixed cost is
higher.
***The public sector passenger transport is facing a serious
crisis today due to lack of proper generation of revenue.
continued…. 22
3. *To analyze the incidence of tax burden and its impact on
the profitability of State Road Transport Corporations.
**The tax rate is not uniform.
***The STUs are losing their prime importance and it’s
high time to take effective and timely measures due to
difference in tax policies in different States.
4. *To analyze the organizational efficiency by studying the
inter-relationships between physical performance and
financial performance of State Road Transport
Corporations.
**Operating efficiency is poor.
***Lack of adequate sources would result to bankruptcy
and poor performance. continued….
23
5. *To trace out the reasons of detoriation in public
sector transport specifically STUs.
**Cost is higher in most of the segments.
***In the economic liberalization policy of the
Indian government, there appears to be no
political will for further expansion of bus
services.

24
 “SUMMARY AND CONCLUSIONS”
1. STUs should meet the future passenger
traffic.
2. STUs should build up their physical and
financial resources.
3. STUs should become operationally efficient.
4. Personnel expenses were the chief reason
for the losses.
5. STUs should try to reduce staff cost.
6. STUs should control the cost to increase
profits.
7. External factors should also be controlled.
25
 “SUGGESTIONS”
1. A good planning and control system to increase the
demand & profitability.
2. The design of maintenance system for maximum-road-
worthy, clean, comfortable and reliable buses for road
transport.
3. Minimizing waiting time for getting the service &
punctuality.
4. Minimizing approach distant to get transport service.
5. Offering choice in service & innovative services.
6. Carrying passengers not exceeding the seating capacity of
the bus.
7. Training of employees with accountability.
continued….
26
8. Maintaining of inventory.
9. Controlling the capital requirement.
10. Application of techniques to increase revenue.
11. To create a financing organization for facilitating the
development.
12. Construction of central workshop with all modernized
machineries and equipments.
13. Introduction of Bus services in new places wherever roads
are constructed.
14. Construction of staff quarters and transit accommodations.
15. Operating luxury coaches for package tour to tourist spots.
16. Up-gradation of existing tyre retreading plant.
17.Setting up of a separate Motor vehicle department.
18. Professional management with advisory committee.
continued…. 27
19.Computerization of all the activities of the
department.
20.Opening a Driving School.
21.Regulating and monitoring the operation of buses.
22.A low fare rate compared to private operators to
attract passengers and to avoid perishability of
unutilized capacity.
23.Reservation of prime time at starting and
destination to attract higher rate passengers.
24.Commission to hawkers to provide passengers
underwriting a minimum occupancy.
25.Introduction of season tickets/cards.
continued….
28
26. Prize to crew/hawkers for high productivity.
27. Punishment or retrenchment of unworthy
or idle staff by making frequent
evaluation/analysis.
28. Introduction of new fleets and renovation
of old and disposing the outdated fleets.
29. Contractual employment linking with
productivity.
30. Causing less pollution .
31. Developing and implementing a sound
Transport Policy.
29
“SCOPE FOR FUTHER RESEARCH”

Socio-economic analysis.
Environment impact.

30
 “REFRENCES”
BOOKS:-
1. Agarwal, A. K.; Analysis of Financial Statement, Jaipur
University Books House Pvt. Ltd., 1992.
2. Gupta, Aravind.; Public Enterprises-Economic Development
and Resource utilization New Delhi: Criterion Publications,
1984.
3. Jain, J.K.; Transport Economics, Allahabad: Chaitanya
Publishing House, 1988.
4. Khan, R. R; Transport Management, Bombay: Himalaya
Publishing House, 1980.
5. Nair, M.K.G.; Parameters to evaluate STUs Performance
Pune: C.I.R.T, 1984.
6. Vaid Raizada, V.K.; Public Enterprises in India, New Delhi:
Anmol Publications, 1995. 31
REPORTS & PUBLICATIONS:-
1. Report on National Transport Policy Committee, May1980.
2. Andhra Pradesh Hand book of Statistics 1992-93.
3. Ministry of Finance, Economic Survey 1992.
4. Annual Accounts & Audit Reports of State transport undertakings.
5. Fare Policies.
6. Fare & Tax Structure of STUs.
7. Forms of STUs and their functioning-A Comparative study.
8. Capital Financing in State Transport Undertakings.
9. Working Capital Management in STUs.
10. Nationalization of Passenger Transport.
11. Manpower productivity in STUs.
12. Road Transport Taxation in India.

32
DOCTORAL DISSERTATIONS:-

1. Chand Basha, B.S, “Trade Union leadership in APSRTC.”

Dissertation submitted to Sri Krishnadevaraya University 1990.
2. Nagaraj.A. Nationalized Road Transport in Hyderabad State.
Dissertation submitted to Osmania University 1967.
3. Patankar. P.G. Development of Urban Mass Transportation System in
India. Dissertation submitted to Bombay University 1975.
4. Raman .A.V “Working Capital Management in STUs, Dissertation
submitted to Pune University 1982.
5. Sasthry, E.S “Physical and financial performance of some STUs in
India.” Dissertation submitted to Osmania University 1975.
6. Subhash Chand Vaidya “Inter-State Road Passenger Transport in
India, with special reference to Punjab-A study in cost organization
and operations.” Dissertation submitted to Punjab University1983.
Continued…………
33
7. Bagade, M.V. “Management Information System for
Passenger Bus Transport Industry (A special study of
MSRTC)” Dissertation submitted to Poona University, 1980.
8. Laxmi Prasad, J. Human factor in APSRTC-A focus on
conductors. Dissertation submitted to Andhra University 1988.
9. Swamy, B .N. “Operational efficiency, analysis of Transport
Industry through costing techniques-A case study of APSRTC”
Dissertation submitted to Sri Venkateswara University, 1989.
10. Rahi , Kishore “Performance of Public and Private
Transport Undertakings-A case study of Punjab Road ways
and Ambala Bus Syndicate Pvt , Ltd” Dissertation submitted
to Punjab University 1977.

34
ARTICLES & PERIODICALS:-
1. Anantha, M.P.V. “Corporation Strategy of APSRTC.” State
Transport News, Vol.6, No.9, March1992.
2. Biswanath, lahiri. “Growth and Performance of Public
Sector in India.” Yojana, July1980.
3. Mahesh Chand, “Financial Performance of Public Road
Transport Undertaking.” Lok Udyog, April1982.
4. Sridharan, R. “Allocation of Buses to Depots: A case
study.” Vikalpa, Vol.16, No.2 April-June1991.
5. Venkata Narayana, S. “Depot Management Information
System-wit special reference to APSRTC.” Journal of
Transport Management, Vol.16 No.6, June1992.
6. Mohanty & Jhunjhunwala, “Use of stastical techniques in
transport management research”. Prabanhan, Vol. 1, no.1,
July 2009.
35
continued……………..
7. Alexander, K.J.W. “Some Economic Problems of Transport
Industry.” The Chartered Institute of Transport Journal,
Vol.36, No.12, September 1975.
8. Bagade, M.V. “Travel Demand, Supply and Profitability-A
case of GSRTC.” Indian Journal of Transport Management,
Vol.8, NO.7, Jully1994: C.I.R.T Pune.
9. Chand, Bidhi. “Efficiency Measurement in Nationalized
Road Passenger Transport-An outline of Multi-stage
integrated approach.” Indian Journal of Economics, Vol.9,
No.7, Jully1978.
10. Kalyana Raman, S.R & Sehgal, T.R., “Methods for
estimating future road traffic.” Journal of the Indian Roads
Congress, Vol.31, No.3, October1968.

36
37