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Public Transport Service Financial Analysis Of Income and Expenditure at Bmtc

Bengaluru

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 Sambodhi ISSN: 2249-6661
(UGC Care Journal) Vol-43, No.-03 (VII) July-September (2020)
PUBLIC TRANSPORT SERVICE : FINANCIAL ANALYSIS OF INCOME AND
EXPENDITURE AT BMTC, BENGALURU

Dr.R.SAMINATHAN Research Advisor , Assistant Professor & Head , Research Department

of Commerce Bharathidasan University College, Lalgudi-621712,trichy District Tamilnadu
HEMALATHA.P Research scholar, Assistant professor, Mangalore Institute of management
and science No.68,Ullal main road, Near Bangalore University Qtrs Bangalore-560056

ABSTRACT
The purpose of this study is to know the performance of public transport service and to analyze the
income and expenditure of BMTC by applying simple average calculation method. In terms of
comparing its performance and efficiency for 3years. it examines the information found within a
company’s profit and loss account . The study was based on secondary data from records, reports and
profile of the Bangalore metropolitan transport corporation . simple average method is a method which
can be obtained by the average rate of incomes and expenditure items in the financial statement and can
be calculated by multiplying the total of the units simply by the number of receiving variables .
An objective of the study includes analyzing the profitability, recognizing the weak operational areas
and company’s overall financial performance with suitable suggestion for a better soundness and to
overcome from the weak areas analyzed in the company. Transport is considered to be the life line of the
economy of the country. An efficient road transport sector, in particular, plays a crucial role in a
county’s economic progress and growth. Bringing together both supply and demand sides, road
transport sector influences entire gamut of social and economic activities of a country. At present,
BMTC is one of the better run bus transport systems in the country.

Key words: comparative analysis, financial statements, profitability

INTRODUCTION
The term comparative analysis is used to measure the financial relationships between variables over two
or more reporting periods .Businesses use comparative analysis as a way to identify their competitive
positions and operating results over a defined period. There are many different ways to measure
financial performance as the investor may wish to look deeper into financial statements and seek out
margin ups and downs. Comparative analysis is used with simple average calculation method simple
average method is used by taking the average of income and expenses by multiplying with variables to
arrive at the difference.
Transportation is the main source of trading activity which is a part of economic growth which takes
care about movement of humans from one place to another . as we have various forms of transportation
in this paper author concentrates on the public bus transportation in Bangalore
BMTC has attained independent existence with effect from 1997 after bifurcation from KSRTC. it
started functioning under 2 tier system and later switched over to 3 tier system due to increase in the
volume of operations.

Objectives
To compare its performance for various periods
To analyze its financial position
To measure the efficiency of its performance

Methodology

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 Sambodhi ISSN: 2249-6661
(UGC Care Journal) Vol-43, No.-03 (VII) July-September (2020)
Secondary sources: Data involves the Bangalore Metropolitan Transport Corporation manual, Bangalore
Metropolitan Transport Corporation website, annual administrative report BMTC magazines (sanchara)
and existing records

Review of the literature

Devaraj Hanumappaa, Parthasarathy Ramachandranb, T.G.Sitharama,Lakshamana sa and Raviraj H
Mulangic (2016) paper titled “ Performance Evaluation of premium services in Bangalore Metropolitan
Transport Corporation (BMTC) studied about the premium bus services operated by BMTC to analyzed
the cost of operation and maintenance charges. Uma TG,Dr.K Ramachandra (2017) International journal
of Academic Research and development, paper titled “ Public utility transport system in Bengaluru: An
empirical study of BMTC and BMRC services” indicates the importance of public transportation and its
services to the Bangalore city.. Bansal and Gupta (1985) in their study entitled, “financial ratio analysis
and statistics” enlightened that the profitability ratio elements in the industry also have quite high
correlation as compared with other industry.
Shinde Govind.p and Dubey Manisha (2011) has conducted research considering the segments such as
passenger vehicle and commercial vehicle, utility vehicle etc and also analysed SWOT analysis.

Analysis and Interpretation

Table: 1: Table showing The Traffic Revenue from sale of tickets during the period 2015 to 2018
Year Traffic Revenue (in
lakhs)
2015-2016 181450.34
2016-2017 167998.91
2017-2018 168661.33

Chart : 1: chart showing The Traffic Revenue from sale of tickets during the period 2015 to
2018

Traffic Revenue (In lakhs)

185000
180000
175000
170000 Traffic Revenue
165000
160000
2015-2016 2016-2017 2017-2018

Inference:
As per table number 1 and chart number 1 it depicts that the traffic revenue has reduced from the
period 2015-16 to 2016-17 the reasons are introduction of Metro, Car Pooling was popular, the
two wheeler loans were cheaper which prompted people to go for it hence people using BMTC
reduced during this period. This also shows that the services of BMTC have to improve to attract
its potential passengers. In the period 2017-18 it is witnessed that there is a slight improvement
in the revenue which can shoot up to a better level with the innovative strategies that can be
implemented by BMTC.

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 Sambodhi ISSN: 2249-6661
(UGC Care Journal) Vol-43, No.-03 (VII) July-September (2020)
Table: 2: Table showing The Traffic Revenue from Passenger Luggage during the period 2015
to 2018
Year Passenger Luggage (in lakhs)
2015-2016 33.06
2016-2017 22.22
2017-2018 19.48
Chart: 2: Table showing The Traffic Revenue from Passenger Luggage during the period 2015
to 2018

passenger luggage (In lakhs)

35
30
25
20
15 passenger luggage
10
5
0
2015-2016 2016-2017 2017-2018

Inference:
As per table number 2 and chart number 2 it depicts that the passenger luggage has reduced from
the period 2015-16 to 2016-17 from 33% to 22% and from 2016-17 to 2017-18 there is a drop
upto 3% the reasons are as follows the complaints received from passengers stating that buses
do not arrive on time , do not halt at designated stops ,poorly designed , do not handle the
luggage with care even though additional amount is been collected towards transportation of
luggage care towards luggage is not to be found. These are the major factors resulting in decline
in revenue from passenger luggage’s.
Table: 3: Table showing the total employee cost of BMTC for the period 2015 to 2018
year employee cost
2015-2016 80198.14
2016-2017 91737.37
2017-2018 96632.85

Chart number: 3: chart showing the total employee cost of BMTC for the period
2015 to 2018

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 Sambodhi ISSN: 2249-6661
(UGC Care Journal) Vol-43, No.-03 (VII) July-September (2020)

Inference : From the table number 3 and chart number 3 it shows that the cost towards employees
as increased the reasons are increase in the salary of the staffs and BMTC as the work force of 35,267
people and 45% of its expenditure involves salaries of staff (as per 2016 annual report).the continuous
appraisal in the salary and incentives to the employees of BMTC has resulted in the increasing employee
cost even though increase in cost is a negative sign it shows that the BMTC has to retain its existing
employees and the employees have bear the city compensatory allowances to lead a decent living ,
hence even though there is a increase in the employee cost it is justifiable.
Table: 4: Table showing the total cost of BMTC for the period 2015 to 2018

year total cost

2015-2016 1140.61
2016-2017 1064.96
2017-2018 2438.02
Chart number: 4: chart showing the total cost of BMTC for the period 2015 to 2018

Inference:
According to table number 4 and chart number 4 the cost of BMTC has drastically increased
from 2015-18 due to various reasons such as poor maintenance of the buses , high operating
costs ,introduction of many private buses and mini buses , scraping of old buses, strikes and
other disturbances in the society resulting in distraction of buses which is an unreasonable
expenses to be borne by the government . Hence the total cost has been drastically increasing
.there should be some strategies planned by BMTC to alter this situation .
Table: 5: Table showing the Income statement of BMTC for the period 2015 to 2018
year Income (in lakhs)
2015-2016 28945.77
2016-2017 59654.27

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 Sambodhi ISSN: 2249-6661
(UGC Care Journal) Vol-43, No.-03 (VII) July-September (2020)
2017-2018 67990.37

Chart number: 5: chart showing the Income statement of BMTC for the period 2015 to 2018

Inference:
From the table number 5 and chart number 5 it is witnessed that there is increase in income of
BMTC which is the result of increase in bus fares introduction of Volvo buses which supports
better service with higher fare , due to traffic congestions people prefer BMTC for long drives
which has resulted in increase in the percentage of people using BMTC which results in better
income , increase in student passes also results in one time huge income and the buses flying
towards airports have increased which attracts better fares for both passengers and luggage’s
.hence resulting in better income

Conclusions
BMTC is the oldest and well established public limited company which has made a sufficient
name and fame in the minds of public for the services offered. Based on the comparative study of
traffic revenue has reduced due to the reasons are introduction of Metro, Car Pooling was
popular, the two wheeler loans were cheaper and it depicts that the passenger luggage has also
reduced due to the reasons that, the complaints received from passengers stating that buses do
not arrive on time. it shows that the cost towards employees as increased the reasons are
increase in the salary of the staffs, it is witnessed that there is increase in income of BMTC
which is the result of increase in bus fares introduction of Volvo buses which supports better
service with higher fare . therefore if the drivers and staffs are provided with good training
facility to improve the growth BMTC can bring out its performance efficiently

References
1. Devaraj Hanumappaa, Parthasarathy Ramachandranb, T.G.Sitharama,Lakshamana sa and Raviraj H
Mulangic (2016) paper titled “ Performance Evaluation of premium services in Bangalore Metropolitan
Transport Corporation
2. Bansal and Gupta (1985)in their study entitled, “financial ratio analysis and statistics”
3. Uma TG,Dr.K.Ramachandra (2017) International journal of Academic Research and development, paper
titled “ Public utility transport system in Bengaluru: An empirical study of BMTC and BMRC services
4. Dawar Varun (2012) studied that dividend and investment policy are relevant and capital structure
irrelevant to stock prices.
5. Ray Sabapriya (2012) studied the debt burden and liquidity position
6. Raphael Nisha(2013) the results of the study suggests the key to success in industry is to improve
labor productivity and flexibility and capital efficiency

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