Sunday, January 10, 2016


Last year, till December, the ministry of railways had spent 69 per cent of the budgetary outlay of Rs.30,100 crore.

The ministry is looking at several tough measures to augment revenue apart from cutting costs.

Passengers may have to pay higher fares following the finance ministry’s recent decision to cut gross budgetary support to railways ministry by Rs.12,000 crore, a senior government official said.

“The finance ministry has advised us to mobilise our own resources. That can happen if we increase the volume of passengers and freight. For freight, barring coal, the core sector is not so robust with cement, steel and construction sectors performing poorly. We may have to look at the bitter pills of increasing the passenger fares apart from cutting costs,” said the official.

“We have taken up the matter with the ministry of finance and hopeful that our budgetary support will be restored,” the official added. Last year, till December, the ministry of railways had spent 69 per cent of the budgetary outlay of Rs.30,100 crore.

The gross budgetary support constitutes more than 40 per cent of the ministry of railways’ total plan outlay of Rs.1,00,011 crore for this financial year. Ministry of Railway officials said the funding cuts may affect ongoing railway projects and the government may consider increasing passenger fares to generate revenues.

Recently, the government had increased Tatkal booking charges by up to 33 per cent for travel in sleeper class, AC-III tier, AC-II tier and executive class.

The finance ministry informed the Railways that Plan Expenditure in the Revised Estimates for 2015-16 is fixed at Rs. 28,000 crore as opposed to the budgetary support of Rs. 40,000 crore it had been granted, sources said.

The finance ministry has cited the slow pace of expenditure by the Railways for the cutback and also asked the public sector behemoth to meet its revenue expenditure from its revenue receipts.

According to official estimates, the ministry of railways had spent Rs.22,204 crore, accounting for over 56 per cent of the total central funds of Rs.40,000 crore till November this year.

“We are well on track in meeting our plan expenditure. In fact, till December the early estimates show we have already spent around Rs.27,000 crore.

“The expenditure generally picks up in the fourth quarter when we spend around 40 per cent of the total outlay,” said a senior railway ministry official.

More than 25 per cent of the railways’ gross earnings come from passenger earnings and around 65 per cent from the freight. Official data showed the core infrastructure sectors contracted by 1.3 per cent in November this year against growth of 3.2 per cent in the previous month.

“The Railways, at least directionally is on the right track… But movement needs to be a little expedited,” Finance Minister, Arun Jaitley, had said on Tuesday.

Another railways ministry official said it was way ahead in its spending till December-end. “We had targeted to spend around 55 per cent and we have already spent around 67 per cent of the budgetary support. So the pace of work is alright,” the official said.

A recent note released by the railways ministry on setting up a Rail Development Authority of India mentioned that scope of increasing freight tariff is very less even as the traffic is moving to the road sector. The total share of railways in the total transportation of freight traffic has declined from 89 per cent in 1950-51 to 36 per cent in 2007-08.

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