Indian Railways, hamstrung by populist policies of successive ministers, could go the Air India way and default in paying salaries. No one recognises this more than the national transporter?s 13.8 lakh employees.
In an unprecedented move, employees have voiced support for an across-the-board increase in train fares to strengthen the financial position of the country?s largest public utility. Employees fear that worsening railway finances may start impacting timely salary payments soon.
Railways has not raised passenger fares for eight years now, and freight rates have not kept pace with market realities. Political interference has compounded the problem, straining the transporter?s finances.
The railways? operating ratio, which indicates how much is spent to earn each R100, has risen from 75.9 in 2007-08 to 92.1 in 2010-11, pointing to operational inefficiency. It crossed the 2010-11 expenditure target of R87,940 crore, spending R88,129 crore. Total earnings came in at R97,151 crore, below the expected R97,722 crore.
Around 60% of railways? expenditure goes towards wages, besides pensions for 12 lakh retired employees.
Workers feel dwindling finances may force railways to cut costs and they could be the first target. ?Railways cannot continue operating in this way. It needs to take some innovative measures to correct the situation, which endangers our livelihood,? National Federation of Indian Railwaymen president Guman Singh told FE.
Employees suggest an immediate passenger fare hike and freight rate rationalisation to improve finances. The issue was discussed at several meetings of workers and senior railway officials in the last year. The last meeting took place after Dinesh Trivedi took charge as railway minister in July.
?The minister has assured us that something will be done,? Singh said. Various government bodies too have suggested hikes. Last week, the Comptroller and Auditor General joined institutions like Planning Commission and finance ministry in recommending the hike.
Passenger fares have not gone up in eight years even though railways? financial outgo on diesel has soared.
June?s diesel price hike of R3 a litre imposed an additional burden of R720 crore. A R2/litre hike in diesel price last year had increased the railway fuel bill by nearly R500 crore. The transporter consumes 240 crore litre of diesel every year, accounting for 16% of its expenditure.
A section of workers also suggested that railways should resume night operations in Naxal-infested areas to increase freight earnings.
A year ago, railways had suspended running of trains during night in five states of Jharkhand, Chhattisgarh, Orissa, Bihar and West Bengal following several attacks by naxals.
?Railways? health is worrisome. Something needs to be done urgently to prevent the making of another Air India. But any action requires the political backing of ministers. Officials can?t do anything on their own,? All India Railwaymen Federation president Umraomal Purohit said.