With a vote on account (and not a full-fledged rail budget) just weeks away, the Indian Railways once again finds itself in uncomfortable though familiar territory. Their performance indicators till December 2013 show a substantial increase in their expenditures and a continuing decline in their earnings.
With just over a couple of months to go this fiscal, not many in Rail Bhavan are hopeful of stemming the tide. Whoever comes to power after the next Lok Sabha polls will, therefore, be saddled with a ministry stuck in a financial quagmire.
As per their revised estimates, while the railways’ earnings are likely to fall by a staggering Rs 4,558 crore from the budget estimates by the end of this fiscal, their expenses are all set to rise by Rs 1,560 crore. What this means is that its overall net revenues will be down by Rs 6,118 crore from what was projected in the budget estimates (see box).
After paying off their dividend liabilities to the central government, the railways are likely to be left with Rs 5,467 crore in their coffers as “excess” this fiscal. This “excess” is Rs 7,680 crore less than what was projected in last year’s rail budget.
This phenomenal fall in the “excess” is critical since all of it has to be invested in three funds, two of which, the development fund (which meets the expenditure to provide and upgrade passenger amenities), the capital fund (for creation of new assets), have a direct bearing on rail users.
When then minister Pawan Kumar Bansal read out the last rail budget speech last year, Rail Bhavan had estimated that it would end up with an “excess” of Rs 13,147 crore. From this money, Railways had projected investments worth Rs 5,433 crore into the capital fund, another Rs 3,550 crore into the development fund and the remaining Rs 4,163 crore into the newly-created railway liability reserve Fund.
Now, the ministry is staring at a situation where it will not be left with even half of what it had anticipated as “excess”. A steep decline in passenger earnings is what has led to the current situation. Till December 2013, the railways had estimated earnings worth Rs 30,848 crore from the passenger business. They have only managed to earn Rs 26,846 crores, a deficit of Rs 4,002 crore. The expected freight earnings in the same period are down too, by Rs 884 crore. On the other hand, the ordinary working expenses till December have overshot the projected figure by Rs 4,892 crore.