According to Suresh Prabhu, railways is doing public service and hence it shouldn't be asked to pay dividend to Finance Ministry.
Railway Minister Suresh Prabhu on Friday asked why should the railways pay dividend when it is already "over-burdened" with about Rs 60,000 crore worth of public service obligation and increased wage bill due to the latest pay commission report.
"I would just like to make a point. This paying dividend to the Finance Ministry is one area which really needs to be looked into. Why should the Railway pay dividend? This has been a recommendation of the Standing Committee. There have been several unanimous recommendations on this by several Standing Committees that the Railways discharge very useful public functions," the Minister said in Lok Sabha.
Maintaining that the railways was doing a public service, he said the burden on it was "as high as Rs 30,000 crore. This year, the Railways are even more burdened with an additional burden Rs 30,000 crore on account of the recommendations of the Pay Commission," besides paying bonus at the latest rates to its staff. All this has put additional burden on the railways, which has to bear the brunt of it being "India's largest employer", Prabhu said, adding that the issue has to be looked into by the House.
He was speaking after tabling a resolution on several recommendations of the Railway Convention Committee, appointed to review the rate of dividend payable by the railways to the government.
"This is a recommendation of the Committee. I respect it. But over a period of time we really need to look into why the Railways which is already suffering due to several other problems also be over-burdened with the responsibility of paying a dividend and also how the main Budget can actually subsidise or take care of the subsidies which are already there," the Minister said, adding "I think, we need to look into this issue."
Countering the Minister, KH Muniyappa, senior Congress member and former Minister of State for Railways, said the railway committee had "unanimously recommended regarding the issue of dividend."
However, he joined Prabhu in saying that the Railways "are running in public interest and for the common people under certain obligations. So, they could not pay the dividend. At the same time, the Finance Ministry is unable to help the common people of this country."
"The surprising thing is that the government is not coming forward to support the Railways. The projects which have been pending for the last two decades, there has been no thinking on this issue by the Government. The new Planning Commission called the NITI Ayog has not at all given any thought to this issue," Muniyappa said. The senior Congress leader asked the government to accord more priority to modernisation of Railways instead of focussing on bullet trains and complete unfinished tasks like closing of over 11,000 level crossings saying "life is precious".
Muniyappa said Railways had around Rs 65,000-66,000 kms of track and it would need around Rs 5 lakh crore to modernise it, while the Mumbai-Ahmedabad bullet train corridor alone would cost Rs one lakh crore. He said priority should be given to modernisation of the tracks rather than the bullet train, adding that even the governments of Maharashtra and Gujarat have not been able to commit land for the project.
If modernisation happens, passenger trains can run at the speed of 100 kmph than the existing speed of 50 kmph and Shatabdi Express and other such trains at 150 kmph. He said there had been little progress on the Northeast and North-South rail corridors. Lamenting that the Atal Bihari Vajpayee government had given funds to close unmanned level crossings, Muniyappa said the work could not be completed even during the UPA government's tenure and asked the Railway Minister to look into the matter.
He said that over 2.5 crore people travelled every day on the railway network, but the government was unable to provide proper facilities to the commuters. Ganesh Joshi (BJP) said the financial health of the ministry was not good as the Railways spent 97 paise for every rupee it earned. But "the railways connect the border and coastal areas, some of which are not commercially viable," Joshi said. Ashok Kumar K (AIADMK) also said the railways have been providing concessions under 53 categories. Besides, it has a to deal with the salary, pensions and now with the excess burden under the Seventh Pay Commission.
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