Stage set for another railway budget

Stage set for another railway budget

By: || Updated: 13 Mar 2012 09:38 AM


New Delhi: With
passenger fares unlikely to be hiked, Railway Minister Dinesh Trivedi will
present his maiden railway budget for 2012-13 on Wednesday amid concerns
over the financial health of the world's second largest network.

A
cash strapped Indian Railways, which runs 10,500 trains and ferries 22
million passengers daily over 64,000 km of track, is looking at an
earnings shortfall of Rs.7,000 crore. Poor financial management has left
Indian Railways staring at an earnings shortfall despite gross budgetary
support of Rs.20,000 crore last year and a Rs.3,000 crore loan approved by
the finance ministry Feb 6.

"It is an unprecedented situation," a
senior railway official commented on condition of anonymity while
describing the financial crisis. Recently, two expert panels, headed by
former Atomic Energy Commission chairman Anil Kakodkar and prime
minister's adviser Sam Pitroda, said the railways would need around Rs.9
lakh crore over the next five years to follow the safety and modernisation
road map suggested by them. No one knows where the money will come from.
Passenger fares have been on a freeze since 2002-03 as Trinamool Congress
chief Mamata Banerjee, a former railway minister, is opposed to hiking
fares.

In the process, the railways has little money to expand
the network. Trivedi is also a Trinamool man. With 19 members in the Lok
Sabha, the Trinamool Congress is a crucial ally of the Manmohan Singh-led
United Progressive Alliance (UPA) and has often shelved key reforms such
as foreign equity in retail.

"Revision of passenger fares is long
overdue. The railways need to invest in additional lines and build more
rakes," former Railway Board chairman R.K. Singh said. What bothers the
railways is the fact that its operating ratio now stands at 100 percent,
up from 75 percent in 2008-09. This means every rupee generated is spent
on running the network, with no room for expansion.

"All big
projects are at a standstill. The railways are unable to maximise
earnings," said Singh, adding there was no money left to address crucial
areas like the renewal and replacement of existing assets and taking up
further development projects.










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