Losses of the Indian Railways are estimated to increase to Rs24,600 crore ($4.55 billion) in the financial year ending March 31 due to a sharp rise in input costs, resulting in "deterioration of services", Railway Minister Pawan Kumar Bansal said on Tuesday.
Presenting the annual budget of his ministry, Bansal said the loss, which was Rs4,955 crore in 2001-02, surged to Rs22,500 crore in 2011-12 and is estimated to rise to Rs24,600 crore in the current financial year.
And to cut the mounting losses, the railways would maintain financial discipline.
“Austerity and economy in expenditure will be observed by the railways rigorously and no wastage will be permitted,” said Bansal.
He hoped that the fiscal measures taken by his ministry would help improve the railways' financial condition in the coming years.
“As a result of our consistent efforts at maintaining strict financial discipline during the year, the Operating Ratio is estimated at 88.8%. This is a source of great satisfaction as the operating ratio has consistently been over 90% since 1997-98.”
Bansal said the Indian Railways planned to invest Rs63,363 crore ($11.5 billion) in the financial year beginning April 1 mainly on expansion of tracks and improving passenger safety measures.
The total planned investment for the current financial year has been lowered from Rs60,100 crore to Rs52,265 crore.
The Planning Commission has tentatively pegged the railways investment target for the 12th Five Year Plan period (2012-17) at Rs5.19 lakh crore, with a budgetary support of Rs1.94 lakh crore and railways internal resources of Rs1.05 lakh crore.
“The thrust of the plan is on doubling of tracks, safety and passenger and staff welfare, for which I have increased the outlay from about Rs.11,410 crore in 2012-13 to Rs.13,220 crore, an increase of 16 percent,” Bansal said.
Bansal said the railway would get Rs.26,000 crore budgetary support in the current financial year to finance its plan expenditure.
Other sources of financing included Rs.14,260 crore from the railway's internal resources and Rs.2,000 crore from the railway's share in road safety fund.
There was a plan to raise Rs.15,103 crore from the market and mobilise Rs.6,000 crore through public-private-partnership (PPP) route to fund its expansion plans in 2013-14.
Bansal said 500 km of new railway lines would be built and 450 km of narrow and medium gauge lines would be converted into broad gauge lines in the financial year beginning April 1, 2013.
The government has also set a target to double 750 km of single railway lines.