All is not well with Indian Railways's finances. As per the budget presented by railway minister Mallikarjuna Kharge on Wednesday, the ministry is likely to incur a loss of Rs 3,200 crore in the gross traffic receipts.
The railways' operating ratio, which is an indication of financial health, is also not showing encouraging signs.
The revised gross receipts for the current fiscal has been pegged at Rs 140,499 crore, down by Rs 3,200 crore, compared with the targeted Rs 143,742 crore. Kharge said, "Inadequacy of financial resources is a key constraint to Railways following the desired path." In the next fiscal, the railways is looking at a gross traffic receipt of Rs 160,775 crore.
The ministry has incurred a massive loss on passenger operations this fiscal. Against the planned earnings of Rs 42,210 crore in the passenger segment, it is likely to get Rs 37,500 crore – a hit of almost Rs 5,000 crore. In the next fiscal, the ministry is eyeing passenger revenues worth Rs 45,255 crore.
There is some saving grace on the goods front though. The ministry has logged about Rs 500 crore growth from the Rs 93,554 crore targeted last year. For 2014-15, it is looking at goods earnings worth Rs 105,770 crore.
These developments have taken a toll on the railways' operating ratio, which is the amount it spends to earn every Rs 100. The ministry has revised the operating ratio for the current fiscal to 90.8% from the targeted 87.8%.
Industry, meanwhile, is happy about the budget. "Revamping of the Railway, allowing FDI in railways and encouraging joint ventures and public-private partnerships must be explored to access funds. This will infuse the necessary momentum to rail infrastructure upgradation," said Chandrajit Banerjee, director general, Confederation of Indian Industry.