Productivity and Profitability Analysis of Swargate Depot of Msrtc

Abstract

Depot is the most important and crucial operating level unit in Road Transport Corporations. It is here that more than 80 percent of the total manpower and financial resources are invested. Profits and losses are usually determined at depot level on the basis of its operating results. In this paper, we analyze the level as well as growth of productivity and economic profitability of Swargate depot of MSRTC using its monthly data from April, 1995 to March, 2001. Swargate depot, located in Pune city, operates with 130 buses and is usually considered as a representative depot of Maharashtra State Road Transport Corporation (MSRTC). We find that productivity of the depot has declined by around 15% over the sample period. Although, on an average, there is a marginal increase in output prices in comparison to input factor prices, productivity decline has resulted into a significant fall of around 12% in its economic profitability over the sample period.

Keywords: Productivity, profitability, bus transport company

JEL Classification: L92, M20, R40