Mega recruitment drives, a string of abandoned projects and faulty planning are leading the once stable Indian Railways into a financial quagmire
INDIAN RAILWAYS, an analysis of its budget will reveal, is chugging along not so much on its own earnings, but on borrowed money — mostly from the capital market. While internal resources like passenger fare put Rs 14,000 crore in the kitty, the Indian Railway Finance Corporation is supposed to raise Rs 20,500 crore from the market this year, and an additional Rs 10,000 crore via tax-free bonds. Another Rs 1,800 crore is expected to be raised by public-private partnership projects.
These market-related moves emboldened railway ministers from Lalu Prasad to Mamata Banerjee to boast of not relying on government grants. But the expenditure of the railways has been so erratic that the Comptroller and Auditor General (CAG) has come down heavily on the ministry, as 70 percent of its expenditure goes into compensation, under the Sixth Pay Commission.
The budget papers reveal that Mamata took reasonably good care of her staff. The bill for staff amenities was Rs 997.56 crore in the current fiscal and is budgeted at Rs 1,100 crore for 2012-13, which excludes outlay on staff quarters of Rs 295 crore (2011-12) and Rs 300.5 crore (2012-13). Banerjee’s 2011-12 budget speech admits the railways are going through a “difficult phase” to implement the Pay Commission recommendations.
And yet a recruitment process has already been set in motion to fill about 1.75 lakh vacancies in Group C and D posts. Steps have also been taken to fill up about 13,000 posts in the Railway Protection Force. It is good that these mega recruitment drives are supposed to cover the backlog of SC/ST and physically handicapped quota but they will further push the railways into the red.
The second area that came under criticism was wrong planning and consequently abandoning of projects. “The audit examination of the ongoing work of new lines sanctioned for socio-economic development of backward regions revealed that five projects were sanctioned over 20 years ago, nine sanctioned between 15-20 years and 36 sanctioned between 10-15 years were in various stages of incompletion as on 31 March 2010,” the CAG report said. The railways have already incurred a loss of Rs 8,549 crore on these unfinished projects, and an additional sanction of Rs 16,800 crore is needed to complete them.
Railways’ spending has been so erratic that the CAG has come down heavily on the ministry
Obviously, these abandoned projects were not planned by Mamata alone, but began with the individual preferences and eccentricities of Lalu Prasad and others. The cumulative effect, including Mamata’s grandiose plans, is likely to be disastrous.
Undeterred, Banerjee announced: “Improving upon 2010-11, a greater thrust is being given to the expansion of the rail network with a larger allocation of Rs 9,583 crore for new lines. It is planned to complete 1,000 km of new lines in 2011-12. In addition, the leftover new lines from last year’s target will also be completed. Apart from this, Rs 5,406 crore and Rs 2,470 crore has been given for doubling and gauge conversion. Another 114 ‘socially desirable new lines’ will come in the next plan.”
Unfortunately, the latest reports reveal that the Indian Railways is way behind reaching these targets. It is poor Dinesh Trivedi, the current railways minister, who has to abide by Mamata’s dictates to hold on to the portfolio, who will have to face the music.
In spite of Vision Document 2020, the planning is so bad that security, an essential ingredient of railway administration, is the worst sufferer. A report reveals that security expenditure comprised only 2.55 percent of the total expenditure of Indian Railways in 2009-10. The expenditure per passenger on security worked out to only Rs 2.86, approximately, for 2009-10. Further, Rs 1.30 percent and Rs 12.53 percent of the allotted funds between 2005 and 2010 were surrendered by the security department. Mamata, who professes to care for the common passenger, cut the passenger amenities allocation of Rs 511 crore in 2010-11 to Rs 19 crore in 2011-12.
At this rate, the Indian Railways will dangerously veer off-track.
(The views expressed in this column are the writer’s own)
Buroshiva Dasgupta is independent journalist.