The Indian Railways spends 94 paise out of every rupee it earns, leaving 6 paise only as surplus. Even this meagre surplus is continuously on the decline due to non-revision of fares and freight rates, railway minister Sadananda Gowda said while presenting the railway budget for 2014-15.
The railways reported a surplus of Rs11,754 crore in 2007-08, after paying obligatory dividend and lease charges, which has come down to a paltry Rs602 crore in the current financial year, he pointed out. This surplus so generated is too meagre to finance the railways' plans for safety, capacity expansion, infrastructure, improving passenger services and amenities, he said.
The railways need funds to the tune of about Rs5,00,000 crore, ie, around Rs50,000 crore per year over the next 10 years, for ongoing projects alone. This leaves a huge gap between what is available as surplus and what is needed, he said.
While prudent efforts should have been made to address this gap, the tariff policy lacked a rational approach, as passenger fares were kept lower than costs, thus causing loss in the passenger train operations. This loss kept on increasing from 10 paise per passenger kilometer in 2000-01 to 23 paise in 2012-13, as the passenger fares were always kept low, the minister pointed out.
He said the focus so far has been on sanctioning projects rather than completing them. In the last 30 years, as many as 676 projects were sanctioned worth Rs1,57,883 crore. Of these, only 317 projects could be completed and 359 projects remain to be completed, which will now require as much as Rs1,82,000 crore.
In the last 10 years, 99 new line projects worth Rs60,000 crore were sanctioned, out of which only one project is complete till date. In fact, there are four projects that are as old as 30 years, but are still not complete for one reason or another. The more projects we add, the thinner we spread our resources and longer it takes to complete them. If this trend is allowed to continue, many more thousands of crore will be spent without yielding any returns, the minister said.
''The Indian Railways practically carries anything and everything and it never says no to 'a thing' if it fits in the wagons. Most importantly, it is the backbone of supply chain of the defence establishment and plays a very crucial role in security of the nation,'' railway Gowda said while presenting the Railway Budget for 2014-15 in Parliament today.
It carries over one-billion tonnes of freight a year, connecting ports and mines to industrial clusters, but there are still vast tracts in the hinterland waiting for rail connectivity. Though freight business has grown steadily over the years, Indian Railways carry only 31 per cent of the total freight carried in the country by all modes.
While it carries 23 million passengers a day, there are still large number of people who have not set a foot on a train yet, he pointed out.
These are the challenges the railways has to address, Gowda said.
To address these challenges, the minister said, an organisation of this magnitude vested with varied responsibilities, is expected to earn like a commercial enterprise, but serve like a welfare organization.
These two objectives, he said, are like two rails of the railway track, which though travel together but never meet. So far, Indian Railways have managed walk the tight-rope by balancing these twin conflicting objectives.