Rail minister asks finance ministry for R10,000-cr hike in budgetary support

Written by Rajat Arora | New Delhi | Updated: Jun 4 2014, 10:38am hrs
The railway ministry on Tuesday sent a missive to the finance ministry asking for a hike in the gross budgetary support (GBS) in the upcoming rail budget by almost Rs 10,000 crore to Rs 40,000 crore.

In the first meeting with finance minister Arun Jaitley, railway minister DV Sadananda Gowda and railway Board chairman Arunendra Kumar are believed to have asked the government to be more generous with the GBS or waive the dividend (of around Rs 6,000 crore) that the railway ministry has to pay every year.

In the wake of the recent accident in UP in which over 40 people were killed, the railways has also asked for a non-lapsable safety fund from the finance ministry. In the previous NDA government's regime, the railway ministry was given a safety fund of Rs 17,000 crore, which helped them bring down the accident rate.

According to the 12th five-year plan, we should get Rs 2 lakh crore (Rs 40,000 crore per year) as the GBS. But we have been getting far less amount. How do we survive when the passenger fares can't be rationalized without political intervention, a senior railway board member said.

For the past three years, railways has been cutting its annual outlay by over Rs 5,000 crore due to cash crunch. The operating ratio, which was expected to be around 87%, has shot up to 90.4% leaving it with little cash.

The railway ministry is also awaiting for the final nod from the government to increase its passenger and freight tariffs by around 15%. If the railway ministry doesn't increase the fares this year then it will have to cut down its annual plan by around Rs 5,000 crore, which will end up affecting the maintenance of its 64,000-km network.