How Shakti helps

Since its launch in June 2023, Karnataka’s Shakti scheme has transformed mobility, independence, and social engagement for women by offering free bus travel on state-run buses. This initiative, part of the government’s broader effort to uplift marginalised groups, particularly benefits low-income and rural women who previously faced economic barriers to accessing essential services such as education, healthcare, and employment. In just over a year, the scheme has provided over 297 million free rides, costing the government approximately Rs 7,166 crore by September 2024. While the Shakti scheme has garnered widespread support for its positive social impact, debates around its financial viability have intensified as Karnataka’s transport corporations grapple with revenue shortfalls. Examining both the scheme’s social returns and fiscal challenges reveals why the Shakti scheme’s continuation is essential for Karnataka.

For many women, especially in rural areas, transportation costs have long been a significant barrier to education and employment opportunities. By eliminating bus fares, the Shakti scheme has enabled women to travel greater distances without financial strain, empowering them to pursue higher education and formal employment. In remote areas, young women can now commute to urban centres to pursue higher education, which is expected to boost female literacy rates and reduce school dropout rates. Research indicates that when transportation costs are removed, women are more likely to invest in their education and long-term careers. In Karnataka, where rural-urban education gaps persist, the Shakti scheme offers a way to close these disparities and foster a well-educated female workforce.

The economic benefits of increased mobility extend beyond education. With greater access to urban areas, women in rural and semi-urban regions can seek formal employment, where opportunities are more. According to the World Bank, increasing female labour participation could boost a country’s GDP by as much as 27%. For Karnataka, the Shakti scheme could significantly contribute to economic growth by empowering more women to enter the workforce, promoting financial independence, and stimulating local economies, particularly in underserved regions. The scheme also allows women to reinvest in their families, creating lasting socio-economic benefits and fostering resilient communities.

However, the scheme’s fiscal sustainability is a legitimate concern. Karnataka’s transport corporations, including the Karnataka State Road Transport Corporation (KSRTC) and the Bangalore Metropolitan Transport Corporation (BMTC), have reported substantial revenue losses due to Shakti, with deficits exceeding Rs 8,000 crore. Although government subsidies aim to bridge this gap, delays in subsidy payments have worsened the financial strain, with dues accumulating to over Rs 1,500 crore.
Balancing the Shakti scheme’s
social benefits with economic realities requires creative approaches to manage these fiscal challenges effectively.

Implementing targeted usage groups within Karnataka’s Shakti Scheme by excluding higher-income individuals can enhance the scheme’s sustainability and ensure resources are directed toward those in greatest need. This strategy allows the government to focus on low-income women, students, and vulnerable populations such as individuals with disabilities who often face significant financial barriers in accessing essential services. For instance, low-income women can leverage the free transportation to pursue job opportunities and healthcare, while students, particularly those from rural backgrounds, can access higher education, reducing dropout rates. By prioritising these demographics, the Shakti Scheme can maximise its social impact while also mitigating fiscal burdens on the state.

Another potential solution is for the Karnataka government to increase its budget allocation specifically for transportation subsidies, ensuring that public transport corporations can continue operating without compromising service quality. Another viable approach could involve public-private partnerships, where private companies sponsor specific routes or geographic areas, receiving corporate social responsibility credits in return. Such partnerships would distribute the scheme’s financial burden and foster a sustainable operational model, allowing the state to uphold its commitment to women’s mobility without burdening public transport budgets.

Investing in Shakti is also an investment in Karnataka’s economic resilience. Studies consistently show that every rupee invested in women’s empowerment yields multiple economic returns as women reinvest in their families and communities. By enabling women to access education, employment, and healthcare, the Shakti scheme contributes to the development of a healthier, more educated, and economically active female population. Additionally, women’s increased financial independence and enhanced mobility help build critical industries, such as technology, healthcare, and education—sectors essential to Karnataka’s growth.

(The writer is an Associate Professor in the Department of Economics, Christ deemed to be University, Bengaluru)