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Sops hit Railways,loss seen at new high

With the pressure to increase passenger fares mounting on the Indian Railways in the next Rail Budget,the cash-strapped national transporter

Written by Avishek G Dastidar | New Delhi |
November 21, 2011 3:13:09 am

With the pressure to increase passenger fares mounting on the Indian Railways in the next Rail Budget,the cash-strapped national transporter is staring at losses from its social service obligations scaling a new high by the end of the year.

Without the rise in passenger fares,this loss already touched a highest-ever Rs 14,977 crore — the latest available figures with the Railway Ministry — for the financial year 2009-10. Figures for for 2010-11,which are still being compiled,are estimated to be up by a few more thousand crore rupees. But the challenge,as the ministry warms up to preparing for the next Rail Budget,is to afford this heavy financial burden as an outlay next year if the fares are not hiked.

“The revised estimates of this loss for the financial year gone by is Rs 13,300 crore,but it will eventually increase by the end of the year after the compilation is complete because every year this loss increases by about Rs 3,000 crore. So the real challenge is next year,” said a senior railway official.

While the total coaching loss on account of social service obligations is actually upwards of Rs 20,000 crore,the money spent on keeping the Government Railway Police (GRP) and such expenses are deducted from it as they are intrinsic.

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Simply put,this loss is money that practically vanishes from Railways’ accounts without fetching a penny.

Those who have had the first-hand experience of managing these huge losses in Indian Railways,say a fare hike is the only way out.

“Without hiking passenger fares,managing these losses will be very difficult because the cost of coaching operations have been mounting every year,” said Vinoo N Mathur,former Member (Traffic),Railway Board.

“The premium on Tatkal tickets was one of the ways devised to somewhat offset this loss,but that was not enough. In any case,the unreserved and sleeper classes are the main contributors to this loss,” he said.

Highly subsidised ticket fares for the suburban services is a major source of revenue leakage. The suburban trains in the three metros — Mumbai,Kolkata and Chennai — alone cause a loss of Rs 2,214 crore.

Certain commodities,like fruits and vegetables,organic manures,beedi leaves,bamboo,paper,cotton are also allowed to be carried on Railways at highly subsidised,even obsolete,rates.

Whenever passenger fares have increased,this loss has dipped in the next financial year. After the last fare hike eight years ago,this loss saw a dip by almost Rs 100 crore.

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