Part I Bus Fare Hike: MTC Bus Fare Hike Background

In a move that has caused serious heart burn among the working people of Tamilnadu, the newly elected government of Tamilnadu led by Dr.J.Jayalalithaa, increased the prices of public utilities and services like bus tickets, milk and electricity rates. The Government claims that the public utilities are making enormous and unsustainable losses. The only option that they have presented is to raise the rates at which the people can access these public utilities. In effect this government has passed the whole burden upon the working people. While the government’s arguments sound valid on the surface, its true logic and intent can be understood when we dig a little deeper and deconstruct their arguments.

First part of three part series on analysis of the the recent bus fare hike from Working class perspective.

MTC and bus fare hike – Background

On November 17th, 2011, Tamil Nadu State Goverment announced a hike in bus fares in Chennai MTC via Government Order 783 published in TN Gazette 431( The proposed hike increased the bus fares by about 1.5 to 2 times in all services including ordinary, express, deluxe, volvo and limited stop services and was effective immediately from the following day. In addition, the daily pass which allowed commuters to use unlimited service in a day was increased from Rs 30 to Rs 50 and the monthly pass was increased from Rs 600 to Rs 1000. The calculation of stages have also changed via this new GO.

According to MTC website (, MTC employs around 22320 workers to operate 3464 buses. MTC owns 25 bus depots for storage and maintenance. As per the website(updated on 1/11/2012), 50.65 lank passengers commute using MTC creating a revenue of 2.90 crore rupers per day.

According to the State Government, the Madras Transport Corporation was bringing in a revenue of Rs 2.15 crore per day prior to the hike( and was operating on a loss of 60 lakh rupees per day( The State Transport department(through out TamilNadu) has incurred a loss of Rs 14533 crores in 2010-2011 and the cumulative loss as on March 2011 is Rs 6150 crore(State Transport Department Policy Note 2011-12).

The State Government has justified the bus fare hike stating the increase in diesel cost, wages and other variable cost in a petition before Madras High Court challenging the hike ( According to State Transport Department Policy Note, about 58% of the revenue(incurred by entire State Transport Department) is spent on the establishment cost and 44% on the diesel cost(Transport Department Policy Note 2011-2012). The Government has also stated that the bus fare hike has not been changed since 2001.

In the months following the hike, the number of commuters in MTC has gone down from 56 lakhs to 50.65 lakhs. The manner of announcement and the hike came under criticism as no time was given for people to absorb the announcement. The immediate enforcement of the hike created a chaos as people sometimes did not even have the fares necessary to commute one way or for return ( A PIL was filed in Madras High Court challenging the bus fare hike. In addition, protests were organized by trade unions and social groups.

Chandrika and Venkat

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