Competition Commission of India holds that Kerala's welfare scheme providing free bus travel under KSRTC does not violate Competition Act despite impact on private operators
In a significant ruling dated 8th September 2026, the Competition Commission of India (CCI) has dismissed allegations of abuse of dominant position levelled against the State of Kerala and Kerala State Road Transport Corporation (KSRTC) concerning the implementation of a welfare scheme providing free bus travel for women and transgender persons. The case, filed by private stage carriage operators Bipin T. Alappat and Jose, had contended that the scheme, known as the `Priyadarshini Scheme' under the `Indira Guarantee' programme, unfairly disadvantaged private operators by conferring exclusive benefits on KSRTC-operated buses.
The Informants, operating a total of 21 private stage carriage buses on various routes in Kerala, alleged that the State's scheme, introduced through Government order GO(MS) No. 16/2026/TRANS dated 11 June 2026, led to a significant diversion of female and transgender passengers to KSRTC buses, which offered free travel from 15 June 2026 onwards. This, they argued, caused a substantial decline in their passenger volumes and revenues, threatening the commercial viability of private operators and thus constituting abuse of dominant position under Section 4 of the Competition Act, 2002.
The CCI, presided over by Chairperson Ms. Ravneet Kaur, along with Members Ms. Sweta Kakkad and Mr. Deepak Anurag, carefully examined the allegations against the backdrop of the Scheme's objectives. The Scheme aimed at socio-economic empowerment by facilitating increased mobility and employment opportunities for women and transgender individuals.
In its detailed analysis, the Commission noted that the provision of free travel was a State-funded welfare measure, with the Government bearing the cost of eligible passengers travelling on KSRTC buses. The Commission held that the mere commercial disadvantage caused to private operators as a consequence of the Scheme could not be equated with unfair or discriminatory conditions, restriction of service, or denial of market access as envisaged under Sections 4(2)(a)(i), 4(2)(b)(i), and 4(2)(c) of the Competition Act.
The CCI observed that private operators had not been excluded from the market and continued to operate their permitted services and compete within the regulatory framework. The preference shown by women and transgender passengers for free travel on KSRTC buses did not amount to exclusion or denial of market access but was rather a reflection of a legitimate welfare policy.
Consequently, the Commission concluded that the implementation of the Priyadarshini Scheme constituted a legitimate State policy measure aimed at public welfare and socio-economic empowerment. It did not constitute an abuse of dominant position by KSRTC or the State, and therefore, no prima facie case was made out against the respondents.
The case was closed under Section 26(2) of the Competition Act, 2002, and the Commission disposed of the interlocutory application filed by the Informants. The decision reinforces the principle that welfare schemes implemented by the State for public interest, even if they impact private commercial entities, are generally not subject to competition law scrutiny unless there is clear evidence of unfair conduct.
This ruling provides important clarity on the interface between competition law and State welfare policies, affirming that commercial impact alone does not constitute abuse of dominance in the context of government schemes designed for socio-economic empowerment.
Bottom Line:
Implementation of a welfare scheme providing free travel for women and transgender individuals in State-operated buses does not constitute abuse of dominant position or contravention of the Competition Act merely because it impacts private operators commercially.
Statutory provision(s):
Competition Act, 2002 Section 4, Section 4(2)(a)(i), Section 4(2)(b)(i), Section 4(2)(c), Section 19(1)(a), Section 26(2)
Bipin T. Alappat v. State of Kerala, (CCI) : Law Finder Doc Id # 2975306
