Palakkad (Kerala) | Private bus operators on Friday said the 50 per cent reduction in vehicle tax announced in the state budget would not be sufficient to ensure the survival of the sector, which they claim is facing mounting losses.

All Kerala Bus Operators Organisation (AKBOO) general secretary T Gopinathan said the relief announced by the government was welcome but fell far short of addressing the challenges confronting private operators.

The state government had reduced the quarterly tax on stage carriage buses by 50 per cent after private bus operators demanded a relief package and threatened agitation.

The key concern of private bus operators is that their business has been affected after the state government’s Priyadarshini scheme, under which women are permitted to travel for free on Kerala State Road Transport Corporation (KSRTC) ordinary buses.

"We do not consider the government's decision to reduce vehicle tax by 50 per cent as a small step. Bus operators pay a large amount as vehicle tax in the state. However, this alone is not enough for the survival of the industry," Gopinathan told reporters.

He said around 8,000 of the state's more than 10,000 private buses are 38-seater vehicles that currently pay a quarterly tax of Rs 19,170.

According to him, the tax reduction would translate into savings of only about Rs 106.50 per day for a 38-seater bus and around Rs 142.50 per day for a 48-seater bus.

"With a relief of just Rs 106 to Rs 142 per day, bus operations cannot continue in the present circumstances," he said.

Gopinathan pointed out that diesel prices had increased by around Rs 8 in recent months and that operators were also bearing the burden of social service cess on fuel.

"The increase in fuel prices alone costs operators additional expenditure of around Rs 640 per day. In that situation, tax reduction alone will not help the industry survive," he said.

He also blamed the state's Priyadarshini scheme for a sharp decline in ridership of private buses.

"Around 70 per cent of passengers in private buses were women. After the launch of the scheme, collections have fallen by 40 to 70 per cent, resulting in a daily loss of Rs 4,000 to Rs 5,000," he alleged.

Gopinathan warned that many operators could be forced to suspend services after June 30.

"There may not be any need for a strike. Many buses will be forced off the roads because operations are becoming financially unviable. Some operators have already stopped services," he said.

The AKBOO leader reiterated the demand for a comprehensive relief package, including extending the free travel scheme to women travelling in private buses, with reimbursement from the government.

He also sought a reduction in fuel prices and urged the state government to intervene urgently to ensure the sustainability of the private bus sector.

Meanwhile, the Luxury Bus Owners Association Kerala (LBOA) on Friday welcomed the Kerala Budget's decision to reduce taxes on All India Tourist Permit (AITP) vehicles, saying the measure would provide a major boost to the tourism and public transport sectors.

In a statement, the association said the reduction of taxes on AITP vehicles by nearly 50 per cent would help revive a sector that had been facing severe challenges for several years.

Under the budget proposals, the tax for ordinary seats in AITP vehicles has been reduced from Rs 2,000 to Rs 900 per seat, while the tax for sleeper berths has been reduced from Rs 3,000 to Rs 1,500.

LBOA said the decision would encourage tourist bus operators to register their vehicles in Kerala instead of opting for registrations in states such as Nagaland, Odisha and Karnataka.

"This tax reform addresses a long-standing concern of the motor vehicle industry. It will encourage operators to register vehicles in Kerala itself, resulting in higher tax revenues for the state and creating a more favourable business environment," the association said.

The organisation also expressed the view that the move would encourage more young entrepreneurs to enter the tourism transport sector.

Welcoming the budget announcement, LBOA office-bearers thanked Chief Minister and Finance Minister V D Satheesan and Transport Minister C P John.