Relief for Railways as Finance Ministry agrees to release Rs 32000 Crore

Minister of RailwaysNew Delhi: In some relief to the railways, the finance ministry has restored support to the national transporter from general exchequer to the tune of Rs 32,000 crore for the current financial year.

The ministry had earlier slashed the gross budgetary support (GBS) to the railways by Rs 12,000 crore for 2015-16, citing slow pace of work.

The railways has asked Finance Ministry to restore its GBS of Rs 40,000 crore. The decision of a 30% cut in GBS had come as a big shock to the railways as it is already grappling with an expected burden of around Rs 32,000 crore, due to the 7th pay commission and a slide in earnings.

The partial restoration came after the railways approached the finance ministry with an explanation for low spending.

“Unlike other ministries, the spending in railways is not a linear exercise. The tendering process and implementation takes time,” said a railway official. “The current dispensation has streamlined the tendering process. It is now taking less time. The spending in the last quarter is going to be high,” he added.

The finance ministry, however, is non-commital on sharing the 7th pay commission burden of the railways and has asked the transporter to find its own resources to meet the outgo.

Railway minister Suresh Prabhu had written to finance minister Arun Jaitley, seeking help in meeting the salary burden.

The transporter has rolled out a slew of austerity measures, including a ban on creation of new posts and curbs on foreign travel, hospitality and entertainment, along with a call for reviewing operation of trains with less than 50% occupancy and closure of services in uneconomic branch lines. But, the measures are not enough to meet the huge liability due to the pay commission.

On the financial burden on the railways, the Union minister had said, “We need to cut energy cost and operational costs and increase productivity.”


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