Railways planned 15 pc cut in expenditure
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Even after a hike in passenger fare and a record haulage of goods, the Railways' financial crisis is far from over. Faced with mounting expenses, the national transporter has decided on a 15 per cent cut in planned expenditure for this financial year.
There will be an imposition of the variable fuel adjustment component on passenger fare this year, even though that will only partly shore up the finances, sources said. For freight rates, this revision has already taken place in the Rail Budget. The Railway Board has sought feedback of the zonal railways on ways to implement this in passenger fare. The impact would result in revision of passenger fare, for which the political leadership of the ministry will have to take a call.
Mounting ordinary working expenses of the Railways are weighing the balance sheets down. Fuel costs comprise around 22 per cent of these expenses. The ministry has directed zones to monitor and regulate the expenditure on fuels and power and submit periodic reports. The zonal railways will soon be given targets to achieve as part of the belt-tightening measures.
Escalating staff costs is also a cause of headache for the Railways. The cost of travelling allowance has gone up by 2000 per cent while travelling expenses have increased by 200 per cent since 2007-08 for the Railways.
Faced with the arduous task of resource management amid such gaping holes, the Railways has decided to decrease its dependency on market borrowings, primarily sourced from the Indian Railway Finance Corporation. Last year, the Railways borrowed Rs 15,000 crore from the market. But currently the ministry has decided that heavy dependence on market borrowings would increase the impact of lease charges, which, in turn, will shoot up the ordinary working expenses. The national transporter has decided that in terms of expenditure not even minor excesses will be allowed because even 1 per cent excess implies a variation of Rs 2,000 crore. The zonal railways would not have any authority to exceed the allotted grant under both ordinary working expenses and planned heads.