Date : 3.12.2016

Give railways funds, let it retain its character: Parliament Panel

Railway finances in the doldrums, parliamentary committee notes, suggests waiver of dividend to government from this year itself.

Report on railways were submitted on Friday

Flagging the poor financial condition of the railways, a parliamentary panel has recommended that the government waive the dividend payable by the transporter to the exchequer for 2016-17. From 2017-18, in any case, the government has already decided to do away with the practice of dividend payment by railways to the finance ministry. This decision followed the larger decision to merge the rail budget into the general budget from next year.

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 The panel has expressed hope that after the merger of the two budgets, the government will infuse more funds into railways without “altering” its basic nature.

When contacted, chairman of the Railway Convention Committee Bhartruhari Mahtab (BJD) told The Indian Express the panel’s report dwells at length on the railways’ finances being “in the doldrums”. Since the seventh finance commission came into effect, the railways has been spending Rs 1.07 rupee to earn Re 1, according to the report, presented in Lok Sabha Thursday.

“The committee trusts that the notwithstanding the merger of railways’ finances with general finances, the basic structure of the organisation is not going to alter and railways will continue to operate on commercial principles besides fulfilling its social obligations,” the report says.

Among apprehensions expressed by Opposition leaders after the government decided to merge the two budgets, one was that railways would lose its social character and might be converted only into a profit-oriented organisation. The panel says it expects railways will not only maintain its distinct identity as a departmentally run commercial undertaking but also continue to enjoy functional autonomy in investment decisions.

“Since railways were… starved over the years, which had led to their inability to expand their network and capacity additions, the committee express the hope that after the merger government will infuse more funds to the railways in the form of gross budgetary support and help them raise extra budgetary resources so as to finance the projects for capacity expansion and decongestion of network,” the report says.

It says it is high time the railways embarked upon effective measures and put in place a robust monitoring mechanism to ensure higher internal revenue generation.

“The committee recommended purely as a one-time move that the rate of dividend payable by railways to the general revenue for the year 2016-17 be waived,” the report says.