Strict fiscal discipline and the resulting trends in Indian Railways

Given the promising trend of loading, the target has been scaled up to about 1052 million tonnes from the budget target of 1047 million tonnes. However, the average lead of freight traffic is falling, and is likely to be 622 km against budgeted 644.5 km. Yet, the Railways is confident of surpassing the freight earnings target which has been increased to Rs 94,000 crore from Rs. 93,554 crore in Budget Estimates. Considering the trend of passenger earnings, the revised target has been kept at Rs 37,500 crore.

There has been continuing strong inflationary pressure on the input costs, especially the cost of fuel, both HSD Oil and electrical energy. There has also been a higher than expected burden on account of significant fresh recruitment in many safety categories, additional dearness allowance for Railway employees and dearness relief for Railway pensioners. Yet, as a result of stringent and close monitoring, the increase under Ordinary Working Expenses has been kept at a modest Rs 560 crore only. However, pension allocation requirements have gone up by a more significant Rs 2,000 crore. Dividend payment to General Revenues has also gone up by Rs 1,591crore with the increase in the rate from 4% to 5%.

Considering the trend of earnings and expenditure, the revised plan outlay stands at Rs 59,359 crore. Operating Ratio of Railways is likely to be 90.8% as against budgeted target of 87.8%.

Continuing the happy trend of 2012-13, and in a marked improvement from the two earlier years, Railways will end the current year with surplus, and fund balances would increase from Rs 2,391 crore at the beginning of current fiscal to Rs 8,018 crore at the end of March, 2014. This is primarily attributable to strict fiscal discipline enforced by the organisation.

Courtesy : PIB