Railways to cut down on Expenses to tide over Funds Crunch

NEW DELHI: Funds crunch is hitting railway operations as revenue shortfall has slowed down work related to safety, including repair and replacement of assets.

The state-run transporter’s shortfall in revenue has widened to Rs.4000 Crore in September, forcing railways to cover it by slashing expenditure even on projects related to track renewal, signal upgrade and other repair work.

After Finance Ministry’s ‘big NO’ for additional funds, the transporter is left with little scope of bridging the revenue deficit in the remaining period of the fiscal, forcing it to cut down spending on normal operations.

“It is not a good thing, but we have to go slow,” said an official, adding that signaling work, track renewal and repair work would suffer.

However, newly-appointed Railway Board Finance Commissioner Rajendra Kashyap said, “We can’t cut down on train operations and safety so all the peripheral things have to take a back seat.”

The spending on soft areas such as staff amenities, which includes refurbishing their residential premises, would be cut to meet the shortfall. “As the internal generation is below expectations, we are trying to cut down expenditure to avoid deficit situation,” Kashyap said.

According to latest data, the transporter is around Rs.3000 crore behind the targeted revenues in the passenger segment and Rs.1000 crore in freight.

Low passenger tariff continues to bleed railways as the loss on this segment will remain around Rs 26,000 crore despite two fare revisions. Another reason for the shortfall is due to ticketless travel which has increased due to the recent hike in fares.

“The shortfall in passenger segment cannot be bridged but we have been able to stabilize it,” Kashyap said, adding that railways is working on better utilization of assets by running trains with more coaches on busy routes to earn more.

He said, “In freight segment, the loading is better than expectations but the lead (average distance per train) has come down. Still we are hopeful of doing better than the budget estimates.”

The transporter has set a plan outlay for Rs.63363 crore for the current fiscal and expects to generate Rs 14,260 crore from internal generation. This year’s total revenue target is Rs.1.43 lakh crore out of which Rs 94,000 crore will come from the freight segment.