Railways need to reinvent itself: Parliamentary Panel

New Delhi: With the resource crunch severely eroding the financial credibility of railways, the Standing Committee on Railways headed by former Railway Minister Dinesh Trivedi has said in the report tabled in Parliament today and further suggested the government should ensure that the proposed five-year investment plan serves as a stimulus package to assist the public transporter in its turnaround.

The Panel also suggested that Indian Railways should not have to pay Dividend to the government of India till the financial health of the railways improve. On the one hand, the Railways are made to pay dividend and on the other hand, government provides budgetary support to the railways. The Committee has asked that a two pronged approach should be adopted by the Government—they should ensure strict financial discipline and practice prudent ways to cut unproductive expenditure and at the same time the practice of paying dividend to general revenues should be kept in abeyance,” the committee has said.

It has called the practice “contradictory and counterproductive”. Incidentally, railways have to pay a dividend on the budgetary support that accrues to it from the government of India on a cumulative basis.

Incidentally, even the debt that accrues to the railways for dedicated freight corridor from World Bank and Japan International Cooperation Agency (JICA) comes in the form of budgetary support from the centre to the Indian Railways. On this the Railways will pay a dividend in perpetuity. The dividend rate is decided by Railway Convention Committee.

The committee has also strongly recommended that National Institution for Transforming India (NITI) Aayog, Ministry of Finance so as to meet their objective of transforming the Railways into an efficient vehicle for development as well as for meeting the increasing demands of economy.

The committee has also asked the railways to tread cautiously on its plans to take additional debt it plans to take from the multilateral agencies as they have huge financial liabilities attached to them.