The brunt of a delay in effecting a rise in railway fares has been borne by suburban rail systems and metro projects, with the railways reducing its spending on this segment by about Rs 2,500 crore (Rs 25 billion).
The railways’ internal revenue generation is only about Rs 8,000 crore (Rs 80 billion), forcing it to cut its planned investment 13 per cent.
At the beginning of 2012-13, the railways had estimated its expenditure at Rs 60,100 crore (Rs 601 billion). But now, this had been reduced to Rs 52,000 crore (Rs 520 billion), said an official. “The main cut in the plan - of about Rs 4,200 crore (Rs 42 billion) - is because of the rollback of the fare rise announced by former railways minister Dinesh Trivedi,” he said.
In Railway Budget 2012-13, Rs 4,733 crore (Rs 47.33 billion) was allocated under the metropolitan transport project (MTP) head. However, it was cut primarily because allocation exceeded the absorption capacity of MTP projects in Hyderabad, Chennai and Kolkata
The cut in overall expenditure was primarily because allocation exceeded the absorption capacity of metropolitan transport projects located in Hyderabad, Chennai and Kolkata.
The railways had proposed to fund the plan size of Rs 60,100 crore from the internal resources of Rs 18,050 crore (Rs 180.5 billion). From the income side, the cut was effected in internal generation, partly because of the rollback of revised fares announced by Trivedi and because of scaled-down earnings of freight traffic, owing to a slowdown in the economy.
The fare rise announced last month, too, couldn’t help the railways increase its plan size. “The Rs 1,200 crore (Rs 12 billion) we would earn because of the fare hike would, more or less, compensate the shortfall in passenger earnings due to lower-than-anticipated volumes. There were not enough passengers for long distances. So, out of the budgeted earnings of Rs 36,000 crore (Rs 360 billion) from the passenger segment, we are now expecting to raise about Rs 32,000 crore (Rs 320 billion),” the official said.
In Railway Budget 2012-13, the government had announced an across-the-board rise in passenger fares. This was expected to fetch the Railways about Rs 4,500 crore (Rs 45 billion). However, due to the rollback in the fare rise, except in the AC-I and AC-II classes, it collected only about Rs 300 crore (Rs 3 billion).
Before his unceremonious exit, Trivedi had announced the annual plan outlay for 2012-13 had been targeted at about Rs 60,100 crore, the highest-ever plan investment. It was said this would be financed through gross budgetary support of Rs 24,000 crore, Railway Safety Fund of Rs 2,000 crore, internal resources of Rs 18,050 and extra-budgetary resources of Rs 16,050 crore, which included market borrowing of Rs 15,000 crore through Indian Railway Finance Corporation.