A crisis on wheels: when a free-ride scheme meets a debt-ridden transport corporation

Question (10 marks, ~150 words):

'A welfare scheme that bankrupts the institution delivering it defeats its own purpose.' In the light of free public-transport schemes for women, examine the tension between welfare and fiscal sustainability, and suggest a viable design.

Introduction:

• Kerala's 'Priyadarshini' free women's bus scheme, costing the debt-ridden KSRTC ~Rs 2 crore a day and provoking private-operator strikes, crystallises the welfare-vs-viability tension.

The case for the scheme:

• Women's mobility is a public good — free/subsidised transit raises female workforce and education access, with economy-wide returns.

Where it breaks:

• A universal, unfunded entitlement loaded onto a loss-making corporation deepens debt and delays salaries/pensions.
• No reimbursement design; private buses and autos lose patronage, triggering livelihood loss and strikes.
• Opportunity cost — Rs 2 crore/day could fund fleet renewal or targeted DBT.
• History: A.K. Antony's 1996 free-bus scheme failed as economics and politics.

A viable design:

• Explicit viability-gap payment from the Budget to the corporation; target the genuinely needy (students, unemployed, low-income women); compensate displaced operators; ring-fence funds for fleet and safety.

Rajasthan relevance:

• RSRTC's own concessions amid heavy losses show the same lesson applies.

Conclusion:

• Empowerment and solvency are compatible only when the promise is honestly budgeted, targeted and cushioned.