An Enquiry into the Production Efficiency and Profitability of MSRTC

The Maharashtra State Road Transport Corporation has been instrumental in providing access and connectivity across the entire state. Over the last few years, due to a variety of factors, particularly falling load factors and competition from the private sector, MSRTC's financial performance has shown a marked deterioration. After the financial turnaround of Karnataka State Road Transport Corporation when it was split into four smaller organisations, it has shown a marked improvement in physical and financial performance. The same solution is suggested by many for large corporations like MSRTC. In this paper, we examine whether splitting of MSRTC into smaller regions would actually help in its financial recovery. Also, we examine the possibility of an improvement in financial profitability by means of enhanced input productivity.