Bengaluru Metro cites Karnataka's financial strain for recent fare revisions of up to 71 percent

Protest against Metro fare revision in Bengaluru in February

The Bangalore Metro Rail Corporation (BMRCL) has cited Karnataka government’s current financial strain as the reason for revising metro fares higher by up to 71 percent earlier this year.

“Till now, the Government of Karnataka (GoK) has been providing Shadow Cash Support (SCS) through budgetary allocation - including cash loss reimbursement and interest-free sub-debt towards loan repayment to the Government of India and domestic financial institutions. Given the present financial position of GoK, the state government may not continue to provide the SCS,” BMRCL said in its fare revision proposal.

Also Read: Bengaluru Metro releases fare fixation report seven months after up to 71% hike

This was revealed in the Fare Fixation Committee (FFC) report - released on September 11 - seven months after the fare hike, and uploaded on BMRCL’s website following sustained public demand, RTI applications, and a High Court petition filed by Bengaluru South MP Tejasvi Surya. Moneycontrol first reported this on September 11.

The report said BMRCL had proposed a 105.15 percent fare hike (Rs 21-123), but the FFC recommended an average 51.55 percent increase over 7-1/2 years. Some slabs, however, have seen fare hikes of up to 71 percent.

Karnataka CM Siddaramaiah, during the fare revision, said he has no control over BMRCL, an autonomous 50:50 joint venture governed by the Union-controlled Metro Railways Act. He accused BJP leaders of misleading the public over fare hikes, noting fares had not changed since 2017, prompting BMRCL to approach the Centre for revision, which led to the FFC’s formation.

Siddaramaiah also said that the state funds 87.37 percent of Bengaluru Metro projects, with the Centre contributing just 12.63 percent (Rs 7,468.86 crore). The state has already spent Rs 25,387 crore, plus Rs 3,987 crore on loan repayments. Much of the central share comes as loans, increasing the state’s financial burden, he added.

Also Read: Bengaluru Metro fare hike: Siddaramaiah says no control over BMRCL’s decision, Tejasvi Surya raises issue in Parliament

Karnataka is facing financial strain after spending Rs 97,813 crore on five guarantee schemes announced by the state government since 2023. The Comptroller & Auditor General (CAG) had recently warned that implementing these schemes without rationalising subsidies could strain state finances, widening fiscal and revenue deficits.

The CAG noted that Karnataka’s guarantee schemes, which accounted for 15 percent of revenue expenditure in 2023-24, contributed to a Rs 9,271 crore revenue deficit and pushed the fiscal deficit to Rs 65,522 crore. Borrowings of Rs 63,000 crore to fund the schemes have increased future repayment and interest burdens, while capital spending fell, incomplete projects rose, and subsidy burden reached Rs 60,774 crore. The audit warned that without rationalising subsidies, these schemes could strain state finances despite their economic benefits.

Also Read: Travellin' Blues: Congested Bengaluru now has the costliest Metro fare in India

Meanwhile, the FFC recommended an Annual Automatic Fare Revision Formula (AAFRF) with 10 distance-based slabs instead of 29, carrying fares in multiples of Rs 10, ranging from Rs 10 to Rs 90. “For BMRCL’s long-term sustainability, fares should cover full O&M costs, loan repayments, and asset renewal. An annual, transparent, and commuter-friendly fare revision formula is recommended, similar to international metro systems,” the report said. Annual fare revisions will be effective one year after implementation, capped at 7 percent per slab or as per the formula, and rounded to the nearest rupee.

Also Read: Why Bengaluru Metro's fare hike of up to 71% has raised hackles

The report added that out of 1,126 public responses (843 via email, 283 via WhatsApp), 51 percent opposed the fare hike, 27 percent supported it, and 16 percent offered suggestions on fares, operations, or monthly passes.

Also Read: Siddaramaiah says Karnataka provides 87% of Metro project funds, promises 220 km network in Bengaluru by 2030

BMRCL is running an external loan of over Rs 13,106.65 crore, plus subordinate debt of Rs 21,521.23 crore, with annual interest of Rs 128 crore and principal repayment of Rs 463 crore. These obligations are expected to rise, and with the completion of Phases 2, 2A, and 2B, depreciation is projected to double over the next five years, the report said.