Economic Performance of Kolhapur Division of MSRTC

economic Performance of Kolhapur Division of MSRTCIntroductionAn attempt is make in this Chapter to analyses the economic capital punishment of MSRTC in Kolhapur percentage based on selected indicators. The entire division is divided into twelve endpoints, viz. Kolhapur, Sambhaji Nagar, Gadhinglaj, Ichalkaranji, Gadhingla, Ichalkaranji, Gargoti, Malkapur, Chandgad, Kurundwad, Kagal, Radhanagri, Gaganbawada and Ajra. The activities of the MSRTC are governed by the corpo point objectives set by the RTC Act. 1950. The main objective as denominate earlier are to provide efficient, adequate, economical and co-ordinated post services to the laymen. However, it is to rig turn up itself on business legal injury, while achieving the aforesaid objective.Financial Indicators constitute per klick (CPKM)For any Road Transport Corporation the main and utmost central financial performance indicator is appeal per kilometer, because it together with CPKM decides the fare. The profitabili ty of an makeup is a function of both woo and values, which are equally sensible in the case of the passenger road transport industry too. An government activity may incur passing game either because the apostrophize go up, the worth remaining the same or costs remaining the same the price/fare may fall. The second phenomenon of fare coming down does non ordinarily arise in the case of passenger road transport industry for reasons of relative ine in conclusionicity of demand for the service monopoly rights conferred on the services and declare regulation of fares.The cost of operations in absolute terms does non by itself forecast measure of costs. prices have to be worked out to compare the cost of providing the service with the rate of earnings. Cost per kilometre is adeptness of such relative measure which is computed by selecting effective kilometre as a unit of measurement.The cost per kilometre (CPKM) is computed by dividing the heartity cost of operations by the fall effective kilometres. The CPKM is expressed in terms of Rupees. The CPKM can be worked out either in respect of the integral cost of operations or in respect of each component of the cost separately. CPKM is calculated by the following formula The direct or operational or shifting costs react proportionately with the kind in mass of operations and the cost per unit, i.e., CPKM is incessant with ledger of operation. As indirect or fixed costs of not change with volume of operations the cost per unit, i.e., CPKM declines as volume rises or increases as volume falls.In the Road Transport industry two different types of costs are consideredFixed CostsThe industry incurs fixed costs relating to bug out of crew wages, general administration, interest and debt charges welfare expenses and part of workshop mechanised wage. This cost per Kilometre varies inversely with the kilometre range achieved but is constant in derive rupee amount.Variable CostsVariable costs are un iform per kilometre but fluctuate depending on the volume of activity in Kilometre. Under this head depreciation, HSD Oil, Tyres, Tubes and spare parts and included. wages per Kilometre (Epkm)The earning per kilometre (EPKM) is computed by dividing the total earning of operations by the total effective kilometres. Revenue in absolute terms without reference to Kilometre will not correctly reflect the Profitability of the operation. An Earning per Kilometre (EPKM) is one of the useful ratios to indicate the earning potential of a route/ terminal/division organisation. The EPKM is related to the carrying capacity of the buses, fare structure and the earning potential of route. The EPKM is calculated by dividing total earnings by total effective Kilometres. EPKM is calculated by the following formula The EPKM is expressed in terms of Rupees. The EPKM may be in relation to either traffic or gross revenue. molding The mete is computed by subtracting the total cost from total earning. Po sitive edge values indicate the profit, while negative margin values indicate loss or deficit.Margin = check Earnings Total CostDepot-wise sparing Performance of Kolhapur DivisionEconomic Performance of Kolhapur DepotEconomic performance of Kolhapur endpoint is explained in the following tableTable 4.1Economic Performance of Kolhapur Depot(In Rs.) yrVariable CostFixed CostTotal Cost(CPKM)Total revenue(EPKM)Margin20019.098.0517.1313.67-3.4620029.148.2017.3414.47-2.8720039.918.3818.2914.47-3.82200410.577.9018.4714.48-3.99200511.508.3819.8815.29-4.59200612.798.6421.4317.75-3.68200713.518.6222.1318.92-3.21200813.698.9722.6619.45-3.21200915.139.4324.5620.99-3.57201015.0610.0925.1521.03-4.12201117.2610.8628.1223.70-4.42201218.9511.7030.6526.19-4.46201320.8612.2633.1228.49-4.63Mean13.659.3422.9919.15-3.85SGR129.4852.3093.35108.41 first Official Records of Kolhapur Division of MSRTC higher up table No 4.1 shows that, cost and earning of Kolhapur stock as per kilometre. Variable cost of Kolhapur fund is increased from Rs 9.09 to Rs 20.86 per km during the probe period. Average variable cost is Rs 13.65, while its SGR is 129.48. Variable cost is highly increased because of the prices of diesel, spare parts and lubricant is continuously increased. In the muse period, fixed cost of Kolhapur depot is increased from Rs 8.05 to 12.26 per km. Average of fixed cost is 9.34 and its SGR is 52.30. Total cost of Kolhapur depot during investigating period, is increased from Rs 17.13 in 2001 to Rs 33.12 per Km in 2013, average total cost is 22.99 and its SGR is 93.35.Total revenue of this depot from year 2001 to 2013 is increased from Rs 13.67 to Rs 28.49 per Km average total revenue of last thirteen years is Rs 19.15. Its SGR is remained 108.41. Due to the low load factor of the buses, total revenue growth remains low as compare to the total cost of the depot.Margin shows always negative trends during the study period, it means the Kolhapur depot experienced always loss during study period. In the year 2002, loss of Kolhapur depot is minimum i.e. Rs 2.87 while it maximize in 2013 (i.e. Rs. 4.63). Average margin of Kolhapur depot during the study period is Rs -3.85, it means economic performance of Kolhapur depot is insignificant.Above figure No 4.1 reveals the trends in the total cost and revenue, it is rig rising in almost same manner. Hence, there is not so much variation in margin, it always perform negatively.The economic performance of Kolhapur depot is not up to the mark, in the study period variable cost, fixed cost and total cost of continuously increased, comparatively rate of variable cost is highly increased i.e. SGR 129.48 and fixed cost SGR is 52.30 and total cost SGR is 93.35. The average of variable cost, fixed cost and total cost (CPKM) is Rs 13.65, Rs 9.34 and Rs 22.99 respectively. In the same duration SGR of EPKM is 108.41 and its average is 19.15. Average margin of CPKM and EPKM is Rs. -3.85. It is put on that in the study p eriod, Kolhapur depot experienced loss in the investigation period.Economic Performance of Sambhaji Nagar DepotEconomic performance of Sambhaji Nagar depot is explained in the following tableTable 4.2Economic Performance of Sambhaji Nagar Depot(In Rs.)YearVariable CostFixed CostTotal Cost (CPKM)Total revenue (EPKM)Margin20019.507.5417.0413.53-3.5120029.617.5717.1913.99-3.2200310.297.7017.9914.41-3.58200410.757.6618.4114.18-4.23200511.708.1319.8314.71-5.12200613.108.2221.3217.36-3.96200713.898.4122.3018.26-4.04200813.809.0722.8818.58-4.3200914.869.7424.6020.06-4.54201014.849.9324.7720.47-4.3201116.6610.8427.5023.91-3.59201217.7311.8929.6223.82-5.8201319.3612.3431.7024.95-6.75Mean13.559.1622.7018.33-4.38SGR103.7963.6686.0384.41Source Official Records of Kolhapur Division of MSRTCAbove table No 4.2 depicts cost and receipts as per kilometre of Sambhaji Nagar depot during last 13 years. Its variable cost increased from Rs 9.50 to Rs 19.36 with Growth deem of 103.79. Fixed cost also in creased from