Under pressure from its own steep targets for pushing business, the railway growth story — as promised in the Rail Budget — seems to be losing steam. In the first six months of the financial year, the national transporter has been grappling with huge shortfall in earnings, and even finding it difficult to speed up execution of key projects. Up to the end of August, there was an overall shortfall Rs 6172.78 crore in earnings as compared to the Budget Estimate for the financial year 2015-16.
“To ensure speedy execution, the (Railway) Board needs to review its budgeting and fund allocation mechanism so that pace of execution does not slag during the first four-five months of the financial year,” a letter from the Prime Minster’s Office said.
While a section of the railway bureaucracy blamed a supposedly tepid economy and the monsoon for the lack of freight business, figures suggested that its own management of the affairs was also to blame.
An in-house analysis by the railway ministry revealed that its expenses for running its affairs went up by Rs 1770.95 crore as compared to the corresponding period of the previous year. Most importantly, all the revenue streams showed a decline over six months.
While earnings from freight continuously suffered, those from carrying passengers — an area where the railway has a monopoly in most segments — was almost Rs 1,900 crore lower than what it should have been to meet the targets.
This year the railway had also pledged to spend Rs 1 lakh crore — the highest-ever for any Rail Budget. But the tardiness is evident from the fact that the railway has been able to spend only Rs 17,000 crore in the first quarter — clearly a sub-par performance. Central to the Rail Budget this year, the execution of 77 doubling works funded from external borrowings has been stuck in files. The NITI Aayog recently gave in-principle approval to a handful of them that will see some action soon.
Sources in the Rail Bhavan argued that since a memorandum of understanding with the LIC for Rs 1.5 lakh crore earlier this year took care of the funding part, any delay will be called a lapse on part of the railway.
Amid all this, there’s a prospect of missed targets.
On the stiff freight loading target of 1190 million tonnes in the current financial year, Railway Board Chairman AK Mital said: “These months of the year are traditionally the season of low freight movements thanks to the rains, low demand and other factors. Freight loading usually picks up towards the subsequent quarters. It is true that we have set high targets for ourselves but as of now there is no reason to believe that we will not be able to achieve those targets.”