The Parliamentary Standing Committee on Railways, headed by veteran BJP MP Radha Mohan Singh, has urged the Union Railway Ministry to make “earnest efforts” to enhance internal revenue generation so that over-reliance on the borrowing component of extra budgetary resources (EBR) is gradually reduced. Expressing concern at the increasing Operating Ratio (OR) of the Railways, the panel asked the Ministry to review their strategic outlook and adopt a long-term strategy for improving the efficiency in operation and for capturing the lost traffic to other modes of transportation.
The panel noted that EBR during 2019-20 was ₹83,247.33 crore and in 2020-21, it was ₹1,28,567 crore, in the revised estimate of both the Budgets.
“In the last Budget of 2021-22, ₹95,200 crore was earmarked as EBR at RE stage as against the BE of ₹1,00,258 crore. In the BE of 2022-23, it has been pegged at higher ever ie, ₹1,01,500 crore,” the report of the panel said and added that that internal resources of the Railways have considerably shrunk and gross budgetary support can provide funds up to a certain extent only. The panel observed that during these years, the decrease in internal resources has led to borrowings and dependence on EBR and as a result, the Railways has to meet hefty interest liabilities apart from the principal repayment.
Operating Ratio
The panel noted that the Operating Ratio of Indian Railways has been consistently high at above 97 per cent since 2018-19. It said to fill the resource gap, the Finance Ministry provided ₹79,398 crore. It said the Railways have not been appropriating any amount to Capital Fund for the last three years. “The Committee opine that had the Pension fund not been fed by the Government and the appropriation to the Capital Fund have been made to the targeted extent, the Operating Ratio would have been much more,” the panel said.
The panel recommend that the Ministry should observe more fiscal discipline and plug leakages and the Railway finances be better monitored and managed prudently by keeping a close watch on the undesirable and unproductive expenditure so that the Operating Ratio is brought down to a reasonable level in the near future.