The central government’s reduction in GST rates on vehicle purchases has provided major relief to the Uttarakhand Transport Corporation. On September 21st, the first day of Navratri, the central government reduced the GST rate on buses from 28 per cent to 18 per cent.
This decision has had a direct and significant impact on the corporation’s purchase of new buses. With the same budget that was allocated for 100 new buses, the corporation will now be able to purchase 109 buses. This means a direct benefit of nine additional buses for the corporation.
The Uttarakhand Transport Corporation has been operating at a loss of crores for several years. Rising diesel prices, high spare parts maintenance costs, and frequent technical breakdowns due to ageing buses had put immense pressure on the corporation. In this context, the reduction in per-bus cost due to the GST cut has come as an economic lifeline for the corporation.
In fact, the corporation’s biggest challenge has always been procuring new buses. In recent years, the corporation’s operations were also affected when BS-4 and BS-3 category buses were banned in Delhi due to rising pollution levels. Furthermore, the existing buses on many hilly routes frequently break down due to age, directly impacting passenger safety and convenience. The availability of new buses will mitigate these challenges.
Tender for 100 buses awarded for Rs 40 crore
Last year, the transport corporation took a loan of approximately Rs 40 crore and placed an order with Tata Motors for 100 new buses. Each bus costs around Rs 39 lakh, including 28 per cent GST, but the central government has since reduced the GST rate by 10 per cent. Since the buses were delivered after this order, the transport corporation saved approximately Rs 3.5 crore.
Services on hilly routes will be strengthened.
The availability of nine additional buses is not just a numerical advantage; it will directly impact services on the hilly routes. For a long time, there have been complaints about a shortage of buses in the hilly districts of Pauri, Chamoli, Uttarkashi, Pithoragarh, Champawat, and Bageshwar. The addition of new buses will improve service regularity on challenging routes connecting villages and towns. It will also enable direct bus services from plains areas such as Dehradun, Rishikesh, Haridwar, Haldwani, Kichha, Rudrapur, and Kotdwar to the hill stations.
The central government’s reduction in GST rates has provided significant relief to the corporation. The same amount of money previously used to purchase 100 new buses will now be sufficient to purchase 109 buses. A proposal to buy these nine additional buses is being prepared and submitted to the government. The arrival of the new buses will also boost intercity and interstate services, which is expected to increase revenue. – Reena Joshi, Managing Director, Uttarakhand Transport Corporation
