A parliament panel has taken strong exception to the steep cut in financial outlay for Indian Railways during the 12th Five Year Plan (2012-2017) and warned it will hit projects, safety and service quality hard.
The Parliamentary Standing Committee on Railways, in its latest report, has particularly faulted the cut in gross budgetary support for the ministry by as much as 40 % -- from Rs.316,842 crore to Rs194,221 crore during the plan period.
"The committee urges the ministry to take up the issue of inadequate budgetary support with the government at the highest level, specially in view of the large pending and ongoing projects so that their benefit reaches the nation at the earliest," it said.
"Non-availability of adequate funds has become a matter of grave concern and needs utmost and immediate attention of the Planning Commission so as to provide qualitative and safe train services to the people," the panel said.
Ranked among the world's top five and one of the largest employers with an estimated 1.4 million people on its rolls, the Indian railroad network ferries 23 million people and 2.65 million tonnes of goods daily from 7,083 stations on 12,000 passenger and 7,000 freight trains over more than 64,000 route km.
For the 12th Five Year Plan, the rail ministry sought an outlay of Rs548,000 crore but the Planning Commission cut it to Rs.519,000 crore. In addition, the manner in which the funds are to be raised was also changed.
The amount to be raised from internal sources was hiked by as much as 77 % from Rs.59,370 crore to Rs.105,000 crore, while for extra-budgetary sourcing like issuing rail bonds, it was hiked from Rs.172,590 crore to Rs.220,000 crore.
This assumes added significance since the ministry has already informed that it will be extremely difficult to raise the targeted Rs.100,000 crore from public-private pacts, given the past experience and challenges faced by long gestation projects.
While reviewing pending projects, the panel found that as many as 88 projects that were sanctioned more than 10 years ago -- and some of them even 20 years back -- were still lying incomplete.
"The committee had expressed serious doubts about the utility of many such projects and desired that the ministry should carry out a proper review at the highest level in this regard so that a decision to continue with them could be taken accordingly."
The committee also noted with concern the practice of announcing new trains without any proper planning because of which 18 new services, out of the 175 that were announced for 2012-13, could not be commissioned.
Plan first, says the report, adding: "The committee, therefore, reiterates that if an announcement is made in the rail budget for starting a new service, every possible measure should be taken by the ministry to implement the same in a time-bound manner."