By IANS,
Hyderabad : With its eyes firmly fixed on next year’s elections, the Congress government in Andhra Pradesh Saturday decided not to increase bus fares despite the steep diesel price hike.
Chief Minister Y.S. Rajasekhara Reddy directed the state-owned Andhra Pradesh State Road Transport Corporation (APSRTC) not to increase the fares and improve the efficiency to minimise the loss.
The decision was taken after the chief minister held a meeting with APSRTC officials.
Corporation chairman and senior Congress leader M. Satyanarayana Rao told reporters after the meeting that there would be no hike as the chief minister was against burdening the common man.
The hike had been feared since the central government raised the price of petroleum products Wednesday. The price of diesel was hiked by Rs.3 per litre, which means an additional burden of Rs.1.5 billion on the corporation.
The hike was bad news for the corporation, which turned the corner to earn a profit of Rs.1.35 billion in fiscal 2007-08. The corporation registered revenues of Rs.36 billion during the year while the estimated expenditure was Rs.34.5 billion.
The corporation’s first profit in a decade will be wiped out with the latest diesel price hike. APSRTC, which has a fleet of 20,000 buses and carries 10 million passengers daily, already has accumulated losses of Rs.14 billion.
This was the second major step of the state government to protect the average citizen from the effects of the price hike.
The chief minister Thursday announced that the state would bear the burden of entire hike of Rs.50 per cylinder of cooking gas (LPG). This means the government would provide a subsidy of Rs.3 billion annually.
However, the government has turned down a demand to cut value added tax (VAT) on petrol and diesel. The state levies 33 percent VAT on petrol, the highest in the country. The VAT on diesel is 22.25 percent.
The state will earn an additional Rs.4.5 billion by the recent hike in prices and even after absorbing the LPG burden, it will stand to earn Rs.1.5 billion.
Ruling out the tax cuts, Finance Minister K. Rosaiah said the state needed revenues to continue its welfare schemes.
Meanwhile, the government has announced it will fill up 26,000 vacant posts in its various departments. This step was also taken in view of the next year’s elections to the state assembly and to parliament.
Rosaiah told a news conference that 20,000 teachers would be recruited soon through the District Selection Committee (DSC).
He said another 6,000 vacant posts in various departments would be filled through direct recruitment.