Parliamentary Panel Pulls Up Railway Ministry [UPSC Current Affairs]

In March 2023, the parliamentary standing committee on railway expressed its displeasure with Indian Railways over its mounting loss. In this article, you can read all about this development regarding the Indian Railways for the IAS exam.

Fall in Revenue of the Indian Railways

• The parliamentary panel expressed its concern with the drastic fall in the net revenue of the Indian Railways which is the excess of net receipts over expenditure of the Railways.
• Indian Railways recorded a loss or negative net revenue of ₹15,024.58 crore in the financial year 2021-2022. 
• The committee in its demands for grant report also observed a drastic fall in net revenue over the last five years from 2018-2019, the revised estimates were reduced by more than 50% and actuals were far behind revenue estimates.
• The parliamentary committee also stated even after continuous support through budget allocation and extra-budgetary resources, railways are not able to generate resources internally which points to the internal deficiency in the overall planning and management of railways.

 What is the reason for the loss?

• The railways stated that it is facing losses due to a steep rise in staff costs after the implementation of the seventh pay commission in 2017-18 and 2016-17.
• The railways also stated that the impact of the pandemic affected the sector adversely in the year 2019-2020 and 2020-2021.
• These events adversely affected the efforts of railways to enhance revenue.
• For the financial year 2022-23, Indian Railways aims to reverse the loss-making trend and has set a net revenue target of ₹2,393 crore. 
• The committee also took note of a high operating ratio which reached 107.39%, the highest ever, in 2021-22. The operating ratio is a measure of how much the Railways is spending to earn a rupee and a low operating ratio is considered financially healthy.
• The committee also noted that the ever-growing social obligations of the Railways led to high operating ratios.

Recommendations of the Parliamentary Committee on Railways

The parliamentary committee gave a series of recommendations to improve the profitability.

• Committee recommended the Railways constitute remedial measures to plug leakages, arrest the declining trend of net revenues, and find ways to improve railways’ revenue.
• The committee also suggested several non-fare measures to raise revenue such as:
  • Advertisements or hoardings at railway stations, trains, bridges and other assets.
  • The monetisation of surplus railway land.
  • Setting up ATMs at railway stations.

• The Railways also reported that now the effects of the pandemic are over and it aims to decrease the operating ratio to 98.22% in FY2022-23.
• The Indian Railways is also undertaking works to improve capacity such as:   
  • Dedicated freight corridor
  • Doubling/quadrupling of railway lines
  • Electrification of railway lines
  • Ring-fencing allocation for ongoing last-mile projects
  • Priority projects for early completion to enhance traffic throughput and increase revenues.

Parliamentary Panel Pulls Up Railway Ministry:- Download PDF Here