labels: Indian Railways
Railway budget likely to show a deficit news
30 June 2009

The upcoming railway budget is likely to show a deficit with the hike in the wage bill, the freebies promised by railway minister Mamata Banerjee and a slower growth in revenue.

Officials at the railway ministry expect the fare cuts announced by the previous railway minister Lalu Prasad combined with the freebies that Mamata has been promising to result in a deficit budget.

Implementation of the Sixth Pay Commission recommendations combined with the fare cuts announced by Lalu Prasad earlier alone would result in an annualised loss of Rs17,000 crore for the Railways, they point out.

Coming on top of these, if Mamata opts to go along with her pet schemes like discounted passes for students and the elderly and improve the quality of food and other amenities for passengers without a fare hike, the impact could be severe, they added.

Railway Board officials fear the operating ratio - the money spent to earn - to go up from 88.3 per cent to 90 per cent, putting pressure on the ministry's finances.

"With the kind of freebies being talked about, without hiking passenger fares, this ratio could go even above 90 per cent. This is bound to take a further toll on the surplus," the official said.

Banerjee had hinted at an overhaul the existing `Tatkal' (instant ticket) scheme and the railway tour packages as also an improvement in the quality of food and passenger amenities, without burdening the passenger.

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Railway budget likely to show a deficit