The R60,100-crore plan outlay announced for 2012-13, the highest ever by the railways, has been now reduced to R55,881 crore. The outlay for FY13 was R49,466 crore in 2011-12. The railways were expecting to generate R18,050 crore in the current fiscal through internal resources but was unable to meet the target.
The plan outlay for the last budget was in sync with the extra revenue we would have earned through the fare hike. Due to fall in the generation of our internal revenues, we have slashed our plan outlay, said a senior railway officer.
In the last rail budget, then rail minister Dinesh Trivedi had announced an increase in passenger fares, which would have earned the railways around R4,000 crore, but the hike was rolled back after opposition from Trinamool Congress chief Mamata Banerjee.
Investments for building or upkeep of tracks and bridges, signalling system, modernisation of rolling stock, stations and freight terminals, capacity augmentation, gauge conversion and passenger amenities are all part of the railways plan outlay.
The slashing of plan outlay indicates how bad the finances of the railways are, as we have to cut investments in segments that are necessary to keep the railways operational. But we'll manage as the funds available have been allocated taking into account the priority of the projects, the officer added.
According to the railways, their operating ratio this fiscal is around 93%. This means they spend R93 to earn R100, leaving them with little surplus to invest. However, the railways had expected the operating ratio to be around 85%. Rail minister Pawan Bansal had earlier admitted that there was a need for a passenger fare hike so that the structure of railways doesnt collapse.