Wednesday, March 9, 2016

Rs 6,095-crore shortfall is the first in five years

Sudheer Pal Singh | New Delhi March 9, 2016 

Passengers board an overcrowded train near a railway station at Loni town in Uttar Pradesh

Indian Railways is staring at an overall negative fund balance of Rs 6,095 crore next financial year despite the rail ministry’s claim that it would manage to successfully handle the impact of the Seventh Central Pay Commission recommendations on its financial health.

The net balance in the six funds — Depreciation Reserve Fund (DRF), Development Fund (DF), Pension Fund (PF), Capital Fund (CF), Debt Reserve Fund, and Safety Fund — is seen changing from Rs 2,467 crore at the end of 2015-16 to an overall shortfall of Rs 6,095 crore in 2016-17 after accounting for the budgeted appropriations and withdrawal from each of the funds, according to the Union Budget. The last time the fund balance had entered the negative territory was in 2010-11 with a shortfall of Rs 4,989 crore.

DRF is meant for upkeep and replacement of assets, DF is meant for expenditure on passenger amenities, Capital Fund is meant to finance capital expenditure works like doubling projects, Debt Reserve Fund was created to tackle staff cost liability and the Safety Fund is meant to create safety infrastructure.

Business Standard had last week reported how the ministry has in this year’s rail Budget cut down the funds meant for DRF to show a less unwholesome operating ratio of 90 for the current financial year. Railway Board’s Financial Commissioner S Mookerjee had last week sought to clarify the “doubt creeping into everybody’s mind” on railways’ preparedness to deal with the Rs 28,000-crore impact of the pay panel’s recommendation.

We have provisioned for this for the past three years. We had set up a fund called Debt Service Fund, which has a balance of Rs 4,000 crore and which we shall be using for this purpose. Similarly, in the Pension Fund, we have a Rs 3,000-crore surplus, which we have been building over the past three years and will be used to meet our immediate concerns,” Mookerjee said, adding the impact of the Pay Commission is of the order of Rs 12,000 crore for salaries and another Rs 8,000 crore for pensions. Budget 2016-17 documents show the railways has a balance of Rs 3,870 crore in the Debt Reserve Fund. In 2016-17, the ministry plans to add another Rs 322 crore in the fund and withdraw Rs 3,000 crore, leaving a net shortfall of Rs 2,677 crore. Similarly, the ministry will withdraw Rs 45,500 crore from the Pension Fund creating a shortfall of Rs 2,528 crore in that fund.

The ministry plans to debit Rs 3,160 crore from the DRF, leaving a balance of Rs 253 crore and debit Rs 2,515 crore from the DF, leaving a balance of Rs 30 crore in 2016-17. Similarly, the railways will add Rs 5,782 crore in the Capital Fund but withdraw Rs 7,000 crore, leaving a shortfall of Rs 1,217 crore. The ministry will withdraw Rs 10,739 crore from the Safety Fund, leaving a balance of Rs 43 crore.


Welcome To AILRSA....


Admin Area

Blog Archive

AILRSA 1970 - . Powered by Blogger.

Follow by Email

Are You Satisfied with 7th Pay commission ?

Popular Posts

Recent Posts

Text Widget