Indian Railways has performed ??eminently well?? financially in 2009-10 despite the burden of sixth pay commission payments and lesser than targeted revenues on account of the economy meltdown. The total earnings of railways at Rs 86,644.43 crore registered 7.95% growth during the last financial year as compared to 2008-09. However, the same was short of the revised Budget target by Rs 2,000 crore.
On the other hand, total ordinary working expenditure escalated by 21% than the previous year and was higher by over Rs 3,000 crore than the revised projection for 2009-10. Total expenditure rose to Rs 84,200 crore against the Rs 82,500 crore projected for the year. The outgo on account of sixth pay report was Rs 13,600 crore.
The FE had reported on May 22 that if the expenditure growth continues to be higher than the growth in earnings, railways may find it difficult to pay dividend in the future. This is because the entity have utilised almost the entire fund balances available with it, according to a senior railway official.
??Railways will pay the full dividend due to general revenues in 2009-10,?? the entity said. ??…Cash surplus is reckoned only after the requirement for dividend is set aside. Therefore, even if cash surplus runs low, there is no question of divined being skipped,?? the national transporter said in response to the FE report.
Railways has committed to pay Rs 5,539 crore to the government for the year. ??The system in the railways ensures various economy measures. In addition, expenditure and earnings are regularly reviewed to ensure that are on target,?? they said.
??Railways has saved about Rs 1,888 crore in revenue expenditure through austerity measures in 2009-10… The credit for the good financial performance in 2009-10 goes to the zonal railways which have made every effort to ensure austerity in expenditure,?? they said.
As reported by FE, Railways has directed zonal GMs to prepare action plans to cut costs. In addition, plans are afoot to increase revenue even through sale of scraps and recovering the outstanding amount of Rs 1,500 crore from the zonal railways.