Parliamentary Panel for removing Cross-subsidy in Rail Passenger service

NEW DELHI: A parliamentary committee has recommended to railways to draw out a plan for eliminating cross-subsidy for passenger service in a phased manner.

Standing Committee on Railways in its latest report has said that cost of service on passenger traffic is more than the cost on freight service and so the earnings from freight service are used for cross-subsidising passenger traffic.

The committee chaired by TMC MP Sudeep Bandopadhyay has recommended railways to conduct a detailed study and draft a medium/long term plan to eliminate the provisions of cross-subsidy in a gradual manner.

The loss of railways on passenger service is about Rs 33,000 crore a year which is cross-subsidised from freight earnings.

The parliamentary committee report submitted today has advised the Railway Ministry to constitute an independent authority for fixation of passenger fare and freight charges depending on cost involved so that it brings both rationally and flexibility.

The committee has found that the very purpose of removing the dividend liabilities is defeated when they are used to partly meet the shortfall in taffic earnings and not utilised in creating assets or increasing net revenue of railways.

After the budget merger, railways is exempted from paying dividends which is about Rs 9,000 crore a year.

The committee has expected the ministry to judiciously spend the amount on capital or asset formulation of railways so that the utility of these savings will be enhanced exponently in order to cater to the financial needs of railways.

The committee has recommended that reimbursement of operational losses on strategic lines and rail lines in hilly, coastal and backward areas should be continued and desired the Railway Ministry to pursue the matter with Finance Ministry.

A separate fund allocation for national projects and projects of strategic significance, social importance in backward and hilly areas also has been recommended by the panel.

The committee feels that an integrated rail development policy should be brought out with effective parametres and explore possibilities to enhance the revenues through alternative avenues such as modernising technology, punctuality and safe travel along with capping of leakages in railway resources.

On railway safety fund, the committee has noted that there are multiple factors which may influence the financing of the Rashtriya Rail Sanrakshak Kosh (RRSK) in future.

It has recommended the ministry to ensure the dedicated financing of railways safety fund which should preferably be non-fungible.

The comittee has asked the ministry to ensure the optimal utilisation of the fund strictly on the works it has been asigned to.

The committee is sanguine that the ministry within shortest possible time, would be able to replace order coaches with LHB coaches with anti-climbing protection facility and install train protection system on locos to prevent head-on collisions.