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1.1 INTRODUCTION
Transport system is the barometer of economic, social, and commercial
progress. It has transformed the entire world into one organization. Transportation
assumes strategic importance in the development process of an economy. An efficient
transport system stimulates the process of economic development. Economic
development in turn itself creates activity patterns which generate further demand for
transportation. Thus transportation can aptly be considered both a cause as well as a
consequence of economic development.1
The transport system provides one single mean for the opening up the country
for the upliftment of the economic level of a vast rural population. It provides
essential ingredients in extending the money economy to the agriculture sector. An
improvement in the transportation system may lower the input price and hence the
production cost. Transport development reduces seasonal price fluctuation and
facilitates technological diffusion. Transport sector bears a close and complex
relationship with all other sectors of an economy. Efficient Administration, Military,
defense, famine relief, growth of Agriculture Industry trade, effective movement of
food and other necessities of life. The even distribution of population and growth of
towns and ports, all depends on the efficiency and sufficiency of transport system.
Besides these economic benefits, transport provides non economic benefits
also. It promotes political cohesion, reinforcement of natural security and
encouragement to socially desirable settlement patterns.2
1.1.2 History and Development of State Road Transport Corporation in India
Road transport has played a vital role in the development of rural area. No
other means of transport except road are able to serve these regions. Development of
road transport is not of recent origin but as old as human civilization.
In the year 1898 the first motor vehicle was driven on the Indian roads. The
recommendation made by Jayakar Committee in November, 1927 where regulating
periodical road conferences and creation of road development fund. As a result, the
first road conferences were devised for uniform motor vehicle regulations. The Indian
Road congress was founded in 1934 as a permanent organization in place of
periodical road conferences. The importance of road came into focus during the
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Second World War because railways alone were not adequate to fulfill the
requirement of transport.
In the year 1939 the motor vehicle act was passed for regulating motor
vehicles all over the country. In December 1943 a conference of chief engineers was
held at Nagpur under the Chairman of Mr. J.V.Sugar to prepare road development
programme at National level. It was popularly known as Nagpur Plan. This Plan
divided the roads in four parts via; (1) National Highways (2) Provincial Highways
(3) District roads and (4) Village roads. The National Highways were further divided
into five categories under Road Development Plan as National Highways, State
Highways, Major District Roads, Other District Roads and Village Roads. Road
Transport Corporation Act was passed by the Government of India in 1950 for the
better functioning of the Road Transportation.
1.1.3 Himachal Road Transport Corporation
Road transport plays an important role in the process of economic
development of any state. In a hilly state it is considered to be the life line of the
people. In Himachal Pradesh where other means of transportation is negligible the
road transport acquires added significance. It has changed the life of people of the
state since its inception. In order to accelerate the process of economic development
of the state the HRTC was established in the year of 1974 after the merger of Mandi-
Kullu Road Transport in Himachal Government Transport.
In Himachal Pradesh, the passenger and goods transport was completely
nationalized during the year of 1949. It was put under the control of Himachal
Government Transport. This department acquired a fleet of 107 vehicles which
included 52 buses operating on 21 routes covering 19 Lacs K.ms annually. Mandi-
Kullu Road Transport Corporation was established during September 1959 mainly
with the object for operating passengers transport services on Pathankot-Mandi-Kullu
section. It was established as a corporate body in the year 1959 with the share capital
contribution of the Punjab state, Government of Himachal Pradesh and Northern
Railway in the ratio of 40:40:20 respectively. With the merger of hilly areas of Punjab
in Himachal Pradesh as a 1.11.1966 a long cherished goal of the people of the Pradesh
was fulfilled. Himachal Pradesh Road Transport Corporation came into existence on
2.10.1974. Himachal Pradesh Road Transport is an organization providing Passenger
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Road Transport Services to the general public under the ownership of state
government and it is established under section 3 of Road Transportation Corporation
Act, 1950.
After the nationalization of bus transport, economic activity picked up even in
inaccessible areas of Himachal Pradesh. Himachal Road Transport Corporation has
developed a bus route network in remote and inaccessible areas like Lahaul-Spiti,
Kullu, Sirmour and Chamba. Besides providing passenger transport in the State,
Himachal Road Transport Corporation has been operating as goods transport system.
It is also providing food and essential commodities to the remote corners of the state
even where private truck owners hesitate to go. HRTC has undoubtedly, played a
major role in the economic development of the state.
At present Himachal Road Transport Corporation has 23 operational units
functioning in the state. The operation of the corporation is being controlled by four
divisional officers functioning at Shimla, Mandi, Dharmshala and Hamirpur. The
objective of the corporation is to provide better transport service to the people and the
corporation is doing its best to achieve this objective.
1.1.4 Organizational Structure of Himachal Road Transport Corporation
In order to know the ins and outs of the working of an organization, it is
important to analyze its organizational structure. Since the year 1975, Himachal Road
Transport Corporation has a three tier structure. The corporation office at Shimla
controls four divisional officers located at Shimla, Hamirpur, Dharamshala and
Mandi. These divisions control the Regional Offices (Depot) under them.
The management of the corporation vests in the Board of Director consisting
of 16 directors including the Chairman, Vice Chairman and Managing Director. Out
of 16 directors, 15 are nominated by the State Government and one is appointed by
the Central Government. The Managing Director is the Chief Executive of the
Corporation. There are three general managers who look after the Secretarial work of
the board of directors, administration, traffic operations and technical operations. The
three General Managers are General Manager Administration, General Manager
Operation and General Manager Technical. The transfers of employees even at lower
level, starting a new schedule, control of flying squad etc. all is under the corporate
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office. This Office is known as Head office which works as corporate office for taking
policy decisions and further asks the divisional offices to get it implemented the
decision taken from the units.
The Accounts Department is being headed by the Financial Advisor cum
Chief Accounts Officer (F.A. and CAO) who is a government nominee. The five units
named Dharamshala, Palampur, Baijnath, Pathankot and Chamba are being controlled
by Dharamshala Division. Mandi division controls five units, namely Kullu, Keylong,
Mandi, Sarkaghat and Sundernagar units. Hamirpur division controls five units
namely Bilaspur, Nalagarh, Una, Hamirpur and Dehra. Shimla division controls eight
units namely Shimla Local Unit-II, Shimla Rural Unit-III at Dhalli, Shimla Tara Devi
Unit-I, Solan, Nahan, Rohru, Rampur and Recong Peo. In addition to this, there are
four workshops at Taradevi, Jassur, Parwanoo and Mandi. The workshops at Tara
Devi and Jassur are responsible for major oversetting of engines and fuel pumps
assemblies etc. The workshop at Taradevi is responsible for printing, stocking and
issue ticket books to Regional Offices. The workshop at Parwanoo, Mandi and Jassur
are responsible for fabrication of bus bodies, tyres retreading etc.
The Primary Accounts are maintained by each divisional office workshop unit
and rendered to Head Office for consolidations. Account wing at Head Office headed
by Financial Advisor / Chief Accounts Officer look after the work of account wing.
The divisional officers headed by Divisional Manager work more or less as a channel
between the Corporate Office and the Regional Office. Divisional Office gets the
compliance variant from units. It also amalgamates policies/ strategies framed by the
Head Office. It compiles all the information pertaining to the working of every unit
and monitors the functioning of each unit.
1.1.5 Privatization of Buses in Himachal Pradesh
Liberalization of the road transport sector introduced under the amendment act
1988, by the government of India has resulted in rapid increase in private participation
in the transport sector. Through this transport policy, the government of Himachal
Pradesh in February 1991 proposed to have passenger transport in the ratio of 70:30
between Himachal Road Transport Corporation and Private Operators. As per
notification in May 1991, HRTC and Private Operators have maintained the
prescribed ratio of 70:30 at the district level.
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Himachal Road Transport Corporation at the time of its inception during the
year of 1974 was having 819 buses while the number of private buses was almost
negligible in the state. During the year 1990-91, HRTC was having 1525 buses and
number of private buses were 147 only (hence the ratio was 91:09). But private buses
have been increasing year after year at a very fast rate and the ratio of 70:30 between
HRTC buses and private buses was totally violated. Presently, HRTC has a fleet of
2026 buses where private have reached to 3307 buses in the state. Thus, ratio between
HRTC buses and private buses came around 38:62. Due to the state government’s
policy of liberalization and privatization the size and share of Himachal Road
Transport Corporation buses is synchronizing year by year.
1.1.6 Efficiency
The comparison of what is actually produced or performed with what can be
achieved with the same consumption of resources (money, time, labor etc.) It is an
important factor in determination of productivity. There are different types of
efficiency- productive, allocation, X- Inefficiency, Dynamic, Social, Financial,
Distributive and Technical efficiency.
Technical Efficiency: Technical efficiency is the effectiveness with which a given set
of inputs is used to produce an output. In last few years government has given more
attention towards the improvement of transport inputs like technology, engine, fuel,
tyre and springs etc. By these improvements, the earning per kilometer is increased
and cost has decreased. By using new technology life of the vehicle increases.
Technical efficiency of seen in terms of increased earning per bus per day, decreased
expenditure per bus per day, less breakdowns and accidents etc.
Viability and Technology: The use of input which ultimately reflects cost and
returns are determinant of viability. If the cost on transport and returns are equal, the
transportation can be considered a viable one
1.2 Review of Literature
In India public sector enterprises played an important role. It has contributed
significantly for the development of this country. No doubt few public sector
undertakings were existing in India prior to the Independence like P&T and Railways.
After Independence the role of public sector increased many folds. There is a plethora
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of literature available on public sector. However, the role of public sector started
synchronizing after the government initiated the structure adjustment, programme and
initiated a number of measures for bringing reforms in the economy. The
liberalization, privatization and globalization programme were accorded the place of
prominence. All these measures have reduced the role of public sector undertaking in
India. With the starting of the disinvestment process of public sector, its size has
shown a decreasing trend. Here we are presenting the studies which have been taken
for measuring the performance, functioning and evaluation of public sector in India.
Tyson (1970)4 took up the issue of raising the bus fare at the peak hours in U.K. Heb
studied the effect of differential bus fear in Greater Manchester for the period 1970 –
1975. The study was based on passenger behavior one day before and one day after
each policy change. The study reveals that the surcharge on the fares during the peak
period does not have any adverse impact on the traffic.
Satyanarayana (1971)5 observed that the cost of the service of road transport
depends upon the size of the fleet, the vehicle condition and the length and road
condition. His study attempts to find out the inter-relationship between these factors
on the basis of the data collected from a representative sample of motor vehicle
operations in Andhra Pradesh. He observed that the size of the motor transport unit
has been a fundamental factor influencing the cost of operations of motor transport
industry.
Seth (1972)6 while analyzing the function of joint management council in Public and
Private sector undertaking observed that Public sector enterprises formed joint
management council under the direction of the government, whereas Privates sector
enterprises had already launched the scheme of participative management. It was
observed that this scheme of joint management councils is functioning better in
private sector as compared to the Public sector undertaking. The worker and the
management have shown much more interest in this participative scheme in private
sector than in the public sector undertaking He highlighted the need of cooperative
attitude among workers and management for the success of the participative
management schemes. He argues that the success of the scheme depends upon the
need for participation as felt by the employees, manager and workers for the
accomplishment of their respective goals.
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Pereira (1975)7 examined the causes for the leakage of revenue in metropolitan
transport organization and inferred that metropolitan service earns no profit mainly
due to human problems. Leakage may be because of ticket less travel, by not paying
for luggage carried, for over travelling beyond stag permitted by ticket, by issue of
spurious tickets etc. He suggested that overcrowding foot-board travel and
indiscipline in the bus should be reduced. Dishonest crew should be detected. Special
cadre with integrity, honesty and efficiency should be periodically employed on the
various routes to have a better collection with normal crew. Special buses should be
introduced during peak hours. Checking should be strengthened and dishonesty and
cheating should be severely punished. Sample incentive schemes linked to collection
should be introduced.
The National Transport Policy Committee (1980)8 in its report on “Passengers
Road Transport in India,” taking the cross-sectional data of 31 undertakings for 1976-
77 observed that the unit cost was mainly influenced by two variable namely fleet
utilization and vehicle utilization. The committee advocated for a direct exchequer
subsidy to urban transport undertakings in view of the social benefits that they extend.
Central Institute of Road Transport (CIRT), Pune, (1980)9 contributed a paper to a
seminar on “How to make STUs Financially Viable?” held by Association of Road
Transport Undertaking, New Delhi. The paper identified the problems of interest
burden, constraints on increasing fare, and leakage of traffic revenue, and traffic
management as major problem in the way of effective management of State Transport
Undertakings and made some Practicable suggestion.
Sharma (1980)10 highlighted the role of board of directors in public and private
enterprises. The research pointed out that in the private enterprises the board of
director enjoys the command of top management and all the important decisions
relating to distribution of dividends to the share holders etc. are taken by the board of
directors themselves, whereas in the public sector enterprises the boards of directors
play a negligible role. It was observed that the private sector boards of directors are
more powerful than that of the public sector undertakings.
Rao K. Rajeshwar (1982)11 while studying the management effectiveness in the
transport operations has stated that Delhi Transport Corporation is not being managed
properly due to mismanagement the corporation running into losses. The study reveals
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that the corporation needs a favourable government attitude in terms of transport
policy; simultaneously the working of the organization is to be improved by
introducing scientific organizational structure, effective planning and sound financial
management only than the corporation can take stand.
Vijay (1982)12 conducted study on “Corporate Model for Kerala State Road Transport
Corporation”. He has pointed out that Kerala government is creating “zones” for the
efficient operations, without many changes in the administrative setup, which has
result in creating another level in the management hierarchy. He feels that any plan
for recognition should take in consideration, among other things, the geographical
factors, the development of other modes of transport and the Kerala State Road
Transport Corporation in the overall transport plan of the state.
Patankar (1983)13 studies the various dimensions of Road Passenger Transport since
1950s and analyzed the operational productivity and efficiency of STUs for the period
of 1973-74 to 1979-80. He opined that the future of road transport sector in India
would brighten only with productivity oriented planning.
Arora (1987)14 made an appraisal of three different bus services operating in the state
of Punjab. It was pointed out that the performance of Private operators is better than
that of Punjab Roadways and Pepsu Road Transport Corporation both in terms of
physical and financial variables. The study further points out that with increasing
economic development and consequent urbanization, the movement of menalong with
materials is likely to go up manifold.
Verma (1987)15 in his study on “performance appraisal of Public enterprises in India”
concentrated on desirable measures to improve the operational efficiency of Public
sector undertakings in terms of productivity, business efficiency and human
efficiency. The study concluded that these efficiencies can be brought about by a
proper pricing policy of the products of the Public sector units, by securing
coordination among various parts involved in operational efficiency.
Acharya (1988)16 examined the necessary of training and development as well as the
need to introduce a well defined recruitment policy in Public sector undertakings. He
highlighted the significance of talent hunting recruitment and training for bringing
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about an improvement in the performance of public enterprises by providing security
and promoting professionalism.
Lowe (1989)17 did a study on the development of transportation system in Japan.
Thus, analyzed the transport and communication system during the Tokugawa Era
(1600-1686) and described the process of development of certain features which
ultimately helped the establishment of modern transport in Japan.
Morris (1990)18 analyzed the cost and time in public sector projects. He pointed out
that delay in projects implementation and attendants cost overrun have become a
regular feature of public sector projects delay and cost overrun have serious
consequence just like that of poor project planning and management, inadequate
funding of projects, bureaucratic indicators lake of coordination and inadequate
technical skills. The study concluded that delay and cost overruns in Public sector
project investment can raise the capital output ratio and bring down the efficiency of
investments.
Naidu (1990)19 in his research work analyzed the form and organization structure of
public enterprises in India. He presented a profile of directors at the board level and
examined the managerial environment and highlighted the extent of control over the
public enterprises. The study reveals that there is no uniform organizational structure
for each establishment in public sector undertakings. The study reveals that
managerial environment is not conductive for effective functioning of public
enterprises.
Kulshrestha (1994)20 selected a new area of study in the State Road Transport
Undertakings. He explains that as the Public Sector Transport has been facing
competition from others means of transport and from the private operators, bus station
management is important. He throws light on the bus station management and offers
some practical ways and means to improve the condition in Uttar Pradesh State Road
Transport Corporation.
Majumdar (1995)21 evaluated relative performance differences between private joint
and public sector. He found that private sector is more efficient than public and joint
sector. Further, the public sector undertakings are less profitable and efficient than
joint sector. He found private sector to be more efficient in area of capital formation
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contribution to national economy due to efficient utilization of available resources and
on account of its growth rate. Although the public sector reforms has helped to
increase the efficiency of this sector but it is not only necessary to continue with the
major liberalization to encourage individual growth but also to undertake speedy
restructuring of public sector undertaking management so that the efficiency gain are
realized in long run also.
Raghavan (1995)22 in his research paper highlighted that the criticism of SRTUs has
become more transparent with the recent policy changes. One of the major criticisms
is that they are, by and large, operations-oriented rather than strategy- oriented. He
observes that the state Road transport Undertakings in India are not really competing
well in an industry, which is becoming more and more unstable. He suggests
competitive types of strategies emphasizing the importance of service marketing
approach
Subramanyam (1996)23 conducted her research work on “Working Capital Analysis
of State Road Transport Undertakings in Tamil Nadu”. She has stated that the
corporation does not enjoy the authority of fare fixation, however the corporation may
be held responsible for day to day operations as reflected in the working capital
position. The author has adopted liquidity rations analysis and concluded that there is
no uniformity between the corporations, as to the influence of factors identified on the
study of current assets. If the physical performance is improved it would take care of
financial performance. The way to improve its physical performance is to improve
fuel efficiency, technical knowhow and to avoid unhealthy competitions.
Gundam (1998)24 examined both the financial and social performance of Andhra
Pradesh State Road Transport Corporation both at the state and regional levels.
Particularly she dealt with the pricing policies. She described in detail the
organizational setup of the corporation along with its various features like capital
investment and staffing.
Kaushal, S.L. (1998)25 observed that Quality of Work Life had Positive relationship
between QWL and Quality of Life and job satisfaction. The Author has suggested
implementing Quality Circles (QC) programmes for improvement in job satisfaction
of 2nd class Employees.
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Ekramul and Alinoor (1999)26 found that the workers of Private Sector Textile Mills
receive significantly higher QWL than their Counter parts in the Public Sector. The
study also revealed Positive correlation between QWL and performance and Negative
correlation between QWL and accidents.
Singh (2000)27 studied the productive efficiency of 21 state road transports
undertaking in India during the period 1984-85 to 1996-97. Multilateral index
procedure is used to compute the growth and relative levels of gross productivity of
the STUs. The study examined the temporal relationship of the cross-sectional
rankings of individual STU’s productive efficiency estimates. The study revealed
wide disparity among STUs with respect to productive efficiency on an average small
size STUs is more productive than the larger one. The productive efficiency ranks of
STUs have remained broadly unchanged over the years.
Batra and Dangwal (2001)28 their study found that Quality of Work Life can be
define and operational zed in term of employees perception of their physical and
psychological well being at work. The another’s further suggested joint labour
management cooperation and participate decision making for making better the
quality of work life.
Parmar (2002)29 observed that with the establishment of new corporate culture, new
vistas in the QWL areas would be explored with the advancement in technology.
These changes in technology will force the leaders in industries to think in different
terms of establishing a new work culture. The further opined more autonomy at the
work place and more participative decision making to ensure improved QWL.
Venkatesh (2004)30 studied the technical efficiency of twenty three major Indian
State Transport Undertakings mainly providing rural and intercity passenger transport
service for the year 2000-01. This is done by the estimation of Stochastic Frontier
Production function using the method of maximum likelihood. It was observed that
there is huge disparity in technical efficiency across STUs ranging from 56.15% for
Madhya Pradesh State Road Transport Undertaking to 98.99% for Tamilnadu State
Transport Corporation Average of technical efficiency scores of sample STUs was
found to be 84.22%. The study concluded that given the size of distribution of the
sample STUs and their working environment, the potential gain in productive
efficiency for most of them is very high.
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Agrawal (2006)31 explained the public transport in urban area and given suggestion
for of improvement of vehicle technology in India. Most of the states having public
bus services. In urban area, bus services have been also spread out. Projection of the
increased urban travel demand require that policy measures be adopted the fulfill this
enhanced demand in a sustainable manner. Government of India had cleared that
economic development would not gain in the compromise with economic health of
the nation. For this many strategy has been made, for the development of public
transport as well as pollution less economy. Improvement of vehicle technology
required mandating the phased use of cleaner technologies and cleaned fuels. It
includes both cleaner petroleum fuels and as well as alternative.
Kharola and Tiwari (2008)32 explained the public transport system in cities in India
has been largely based on buses and operated by public agencies. The performance of
this organization on the financial front has been rather wanting. Several reasons - both
internal and external – have often been cited for their unsatisfactory performance. One
of the less reached areas has been the various taxes these organizations have to bear.
This paper has been analyzed the different levies on the operation of buses in a city
and also attempts to compare these in different states in the country. It also compared
the taxes levied on other modes of transport. The impact of these taxes on the total
operating cost has also been brought out. This paper concluded that the high rate of
various taxes, one of the reason for the financial unavailability of public transport
system in India.
Sharma (2009)33 examined the working of government for development of national
highway. He highlighted the National Highway development Programme (NHDP)
that is launched by government this project has planned to complete till 2015. It
connects the metropolitan cities – Delhi, Mumbai, Chennai and Calcutta. In this
project the national highway authority of India designing roads with the safety point
of view.
Shiv Agerwal (2011)34 studied the Total Factor Productivity (TFP) growth and its
components in 34 State Road Transport Undertakings (STUs) of India for the period
1989-1990 to 2000-01 using DEA based Malmquist Productivity Index (MPI)
approach. The study finds that on an average, the TFP change is 10.9% per annum
over the sample time period. In order to identify the sources of TFP change, technical
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efficiency change for each STU is also measured. The results show that there is no
significant change in technical efficiency but remarkable change in technology. Thus,
the decomposed index of TFP growth shows that much of the observed regress in total
productivity is explained by the negative change in technology of the STUs, over a
sample period.
1.3 Need of the Study
Public transport in India has always played a vital role in furthering the
economic development of the country. It has shown enormous growth in all parts of
the country and Himachal Pradesh is no exception to this rule. The rational for the
establishment of public sector as a part of social economic policy inherent in the
economy. The public enterprises where established in all the sectors of the economy.
As result of the emphasize given in the establishment of public sector in Indian
economy, the size of this sector increased rapidly. This is evident from the growth rate
in assets and the variety of economic activity now being undertaken in this sector. It
has expanded in public utilities, industry, finance, commerce and trade of the state. It
has made in roads for the state interventions in all spheres of the activities of
economy.
Since public transport is considered to be a backbone for the development of
the regions for the state, most of the state government in our country, monopolized the
operation of the transportation. The public transport system was considered to be an
instrument for maximization and realization of social gain. Himachal Road Transport
Corporation is one of the biggest Public Sector Corporation of the state. Therefore it
becomes pertinent to study the performance of such biggest public sector undertaking
of the state.
1.4 Scope of the Study
Public transport is considered to a backbone for the development of any
region. In Himachal Pradesh there is an adequate network of roads. Although, being a
hilly area the government of Himachal Pradesh has given due emphasize on the road
transport. It expanded its area of operation and provided transport facilities in most
parts of the state. The Himachal Road Transport Corporation has been divided into
four divisions namely Shimla, Mandi, Hamirpur and Dharamshala. This study will be
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emphasized on the evaluation of performance of HRTC, productivity of both public
and private operators in Himachal Pradesh and economic viability of both public and
private operators in Shimla division. With a view to study the performance of HRTC
certain financial, qualitative and physical indicators will be formulated. Shimla
division will be taken for field study. It is one of the biggest divisions among the four
divisions of HRTC. The Shimla division controls eight regions / units including two
workshops. It covers four districts also. Therefore, it becomes all the more important
to evaluate the performance, productivity and economic viability of road
transportation.
1.5 Objectives of the Study
The following objectives have been visualized for the present research work:
1. To study the growth of Himachal Road Transport Corporation in Himachal
Pradesh.
2. To analyze the productivity of Himachal Road Transport Corporation vis-à-vis
Private Operators in Himachal Pradesh.
3. To compare the economic viability of Public and Private Transport in Shimla
Division.
4. To identify the problems and make suggestions for better performance of
HRTC.
1.6 Research Methodology
Methods of research are determined by the theory of the topic under study,
objectives of the study and resources of the investigation. The present research work
is a study to evaluate the performance of Himachal Road Transport Corporation and
its four units in Shimla Division. The Local Unit Shimla, Tara Devi Unit, Solan Unit
and Recong peo Units selected for the detailed study.
1.6.1 Data source
This study is based on both primary and secondary data. Secondary data will
be collected from different magazine, journals like: Kurukshetra,Yojana, Economic
and Political weekly, Directorate of Transport Shimla, HRTC Head Office Shimla and
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HRTC Divisional Office Shimla, Mandi, Dharamshala and Hamirpur. Primary study
will be held in Shimla Division. Data shall be collected with the help of structured
questionnaire.
1.6.2 Sample design
As already mentioned Shimla division will be taken for field study. On the
basis of secondary information collected, all units of HRTC in Shimla division are
arranged in descending order on the basis of number of employees.
Units in Shimla Division No. of EmployeesShimla 552Tara Devi 369Dhali rural 357Rampur 329Nahan 312Rohru 308Solan 297Recong Peo 260
Out of eight units, four units will be selected on the basis of highest and lowest
number of employees, i.e. Shimla local, Tara Devi, Solan and Recong Peo. Shimla
and Tara Devi having highest and Solan and Recong Peo having lowest employees in
HRTC.
A sample of 400 employees will be selected from Public and Private Operators
from selected four units, i.e. 200 from Public Transport and 200 from Private
Transport. A sample of 200 employees of HRTC selected on lottery basis by
proportionate random sampling. Further sample will be divided into four categories
namely; Managerial Staff, Operating Staff, Technical Staff and Other Staff for
empirical analysis.
Sample Design
Units Managerial staff
Operating staff
Technical staff
Other Staff
Total staff
1.Shimla Local 4 60 8 3 752.Tara Devi 2 38 8 2 503.Solan 3 28 7 2 404.RecongPeo 2 28 4 1 35Total 11 154 27 8 200
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For further analysis, a sample size from Private Operators i.e. 200 employees
will be selected. Since the relevant information for Private employees in Private
sector is not available in records hence sample from Private employees will also
drawn in the same manner as HRTC employees. A structured schedule will be formed
to collect the required data regarding economic viability. Different categories of
employees are managerial staff (management staff, officers, supervisors), technical
staff includes (mechanic, welders and electricians), operating staff includes (drivers,
conductors and inspectors) and other staff includes (yard master, booking clerk,
chowkidar and sweeper).
1.6.3 Analytical Tools
The percentage method, Average Annual Compound Growth Rate, mean,
standard deviation, coefficient of variation, t-test and cost benefit analysis are the
statistical tools to be used in the study.
Statistical Tools
Average Annual Compound growth Rate
While calculating compound growth rate, the following equation has been
used.
r=( An
Ao)
1n−1
r = rate of the growth.
An= is the figure of nth year.
A0 = is the figure of base year.
n = is the number of years.
T-test: T- test will be used to compare the public and private sector organization of
road transportation. Formula is:
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Coefficient of variation
Coefficient of variation is relative measure of dispersion. It is used in such
problems where we want to compare the variability of two or more than two series.
The series for which the coefficient of variation is greater is said to be more variable
or less homogeneous. On the other hand, if coefficient of variation is less is said to be
less variable or more homogeneous. Coefficient of variation is denoted by C.V. and
obtained as follows:
C.V. ¿ σX x 100
C.V. = Coefficient of variation
σ=¿ Standard deviation.
X = Mean.
Cost Benefit Analysis
Cost Benefit Analysis method will be use for analyzing the economic viability
of Public and Private Transport. Collected information regarding cost and turnover of
Public and Private Transport will solve by Cost Benefit Analysis:
CBA= BC
Where:
B = benefit
C = Cost
B/C = 1, economic viable (marginal situation).
B/C > 1, the benefits is more than costs (profitable situation).
B/C < 1, the benefit is less than costs (losable situation).
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1.6.4 Terminology used
In the present work the terminology has been used to avoid repetition of words
is as under like:
1. Earning per Kilometer (EPKM) =
Total IncomeEffective Kilometers
2. Kilometer per Liter (Fuel Average) (KMPL) =
totalDiesel ConsumedKilometers Operated
3. Expenditure per Kilometers (EPKM) =
TotalCost / ExpenditureEffective Kilometers
4. Fixed Cost (FC): The fixed cost includes personnel cost, direction charges,
office expenses, interest charges, others etc.
5. Variable Cost (VC): Variable cost includes cost of HSD, cost of lubricants,
tyres and tubes, spring leafs, store materials, depreciation etc.
6. Load factor is the occupancy ratio in HRTC buses. Out of the total seats how
many seats are being utilized by the passengers? The load factor is being
calculated in the following way:
1.7 Chapter Plan of the Study
The present study will be divided into seven chapters, the details of which
are as follows:
Chapter (I) Introduction.
Chapter (II) Review of the Literature.
Chapter (III) Research Design.
18
Chapter (IV) Growth of Himachal Road Transport Corporation in H.P.
Chapter (V) Evaluation of Productivity of HRTC and Private Operators in H.P.
Chapter (VI) Analysis of the economic viability of Public and Private Transport in
Shimla division.
Chapter (VII) Conclusion and Suggestions.
1.8 Limitation
Limitation of the present study is that secondary data of Private transport is
not available and maintained properly.
19
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