Published Online:October 2025
Product Name:The IUP Journal of Applied Finance
Product Type:Article
Product Code:IJAF021225
DOI:10.71329/IUPJAF/2025.31.4.24-61
Author Name:J Madegowda
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:24-61
State-owned road transport undertakings are vital public utilities that ensure affordable, equitable, and accessible mobility across India. Karnataka’s four transport corporations—BMTC, KKRTC, KSRTC, and NWKRTC— have, in recent years, faced mounting financial stress, raising concerns about their operational sustainability and service continuity. This study evaluates the fiscal health of these corporations over eight years (2016-17 to 2023-24) using two established insolvency prediction models: the Altman Z''-score and the Ohlson O-score. Through longitudinal analysis, the study identifies persistent patterns of financial distress and stratifies risk exposure across entities. The findings reveal that none of the corporations fall within the financial “safe” zone, with KKRTC and NWKRTC exhibiting chronic distress. Beyond diagnosing fiscal fragility, the study underscores deeper structural inefficiencies—including persistent cost-revenue imbalances and limited revenue diversification—while acknowledging the indispensable social mission these entities fulfill. Rather than advocating commercial profitability, the paper proposes a pragmatic framework where predictive financial tools inform evidence-based reforms, targeted state support, and sustainable service delivery. The analysis offers actionable insights for policymakers striving to safeguard the viability of essential public transport without compromising its core commitment to social equity and access.
Public transport plays a crucial role in ensuring equitable mobility, particularly in developing regions where private vehicle ownership remains limited. In the Indian context, state road transport undertakings (SRTUs or SRTCs) have long served as the backbone of intercity and intracity travel for millions.