Karnataka's KSRTC struggles to pay employee provident fund; seeks government help
By Vinaykumar Patil | First Published Nov 26, 2024, 8:54 AM ISTThe Karnataka state road transport corporations face severe financial distress, unable to pay Rs 2,792.61 crore in provident fund dues and interest. Struggling since COVID-19, they seek government aid to resolve unpaid contributions and prevent a deeper crisis impacting employees and operations.
The Karnataka State Road Transport Corporation (KSRTC), already facing severe financial distress, is now struggling to pay employees’ provident fund (PF) contributions. For several months, the RTCs have failed to meet these obligations and have formally sought financial assistance from the state government.
As per the Provident Fund Act, employers must match the amount deducted from employees' salaries and deposit the combined amount into the employees' PF accounts. However, all four RTCs in Karnataka have fallen short in both deducting contributions and making payments to the PF trust.
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As of October 2024, the total dues from the four RTCs, including PF arrears and 2% interest on delayed payments, amount to a staggering Rs 2,792.61 crore. In a letter to the government, the RTCs highlighted their inability to clear this amount and urged financial aid to address the situation.
According to the RTCs' financial accounts, Rs 2,269.09 crore constitutes unpaid PF dues, while an additional Rs 523.52 crore is owed as interest on delayed payments. Among the RTCs, the North West Karnataka Road Transport Corporation (NWKRTC) is the most affected, having failed to pay PF dues for three consecutive years (from September 2021 to October 2024). This has resulted in dues of Rs 821.48 crore and Rs 232.9 crore in late payment interest.
The Managing Director of KSRTC, V. Anbukumar, explained the reasons for the mounting dues in a letter to the state government. The RTCs, he stated, have been grappling with financial challenges since the COVID-19 pandemic. Rising operational costs due to increasing oil prices and employee wages further strained their finances. Consequently, the corporations were forced to divert PF contributions to cover other expenses, leading to this crisis.
The Regional Commissioner of the Provident Fund Office has raised strong objections to the RTCs' failure to pay PF dues. Warning of strict action, the commissioner stated that the exemption granted to transport corporations under PF regulations could be revoked if payments are not made. In his letter, Anbukumar emphasized that such a move could push the RTCs into further crisis, directly affecting employees.
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Faced with dues amounting to Rs 2,269.09 crore and an additional Rs 523.52 crore in interest, the RTCs have made a desperate plea for financial assistance. They argue that government support is essential to resolve the situation and prevent adverse impacts on employees' financial security.
The road transport sector, a lifeline for millions in Karnataka, is now caught in a financial web that threatens its stability. The government's response to the RTCs' plea will be crucial in determining the way forward for the struggling corporations and their workforce.
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