Saturday, February 26, 2011

Railway Budget 2011: where is the money?


New Delhi: Union Railway Minister Mamata Banerjee said, "Its been a tough year... But because of 6th Pay Commission there has been a problem." This is an easy excuse for the bad state of Indian Railways. The fact is Railways is losing money.
Railways lost Rs 1500 crore because of disruption of train movements due to various agitations. Another Rs 2500 crore is lost due to ban on export of iron ore.
This meant that Railways missed the freight target by 20 million tonnes. Revenues are shrinking but working expenses are going up. Expenses went up by over Rs 2000 crore and stood at Rs 67,000 crore.
Their operating ratio was at 92.1 per cent, which meant that Indian Railways is increasingly an inefficient transporter.
But the ministry says the 6th Pay Commission is the villain. Railway experts beg to differ.
Railway Board Chairman Vivek Sahai said, "Railways performance stabilised after 5th Pay Commission. Fifth commission affect felt later 1999-2001 but we stabilised. We have surplus over expenditure. Pension fund Rs 15000 crore more than budget of several states."
If the finances are so bad they why make new announcements. Experts say a populist politician in the Rail Ministry is a bad idea.
Another populist budget, new trains new schemes but where will the money come from to implement these. Mamata Banerjee could well be out of the ministry in a next few months leaving behind financial managers to manage the numbers.


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