Rail budget may bare not-so-rosy financials

The railway budget that will be tabled in Parliament on Friday is most likely to be a document on how much a financial mess the gargantuan is in, and not in the pink of health, as is popularly believed.

In 2009-10, according to sources, the sundry earnings of Railways has fallen by 54% and income by another substantial amount.

Therefore, while presenting a railway budget after a long time, Union railways minister Mamata Banerjee is likely to focus on the falling profitability.

For 2009-10, profit for the railways has been pegged at Rs 2,640 crore. That compares with Rs 5,572 crore predicted in the vote-on-account in February.
Sources said the decline is attributed to a veritable plunge in revenues from freight services.

Freight services, which are the bread and butter of Railways, are expected to cart in a revenue of Rs 58,500 crore, down just short of a percent from the Rs 59,059 crore pegged in February.

The vote-on-account had also estimated sundry income will touch Rs 6,000 crore. But Mamata is likely to bring this projection down to Rs 2,750 crore.

The fall in revenues may have an impact on the security and maintenance operations of the corporation, sources said.

In the last budget, Rs 7,000 crore was allocated towards this, but this year only Rs 5,000 crore will be allocated, sources said. While railways' expenditure is rising at an annual rate of 18%, the growth in earnings is only 7%.

While railways' expenditure is rising at an annual rate of 18%, the growth in earnings is only 7%.

It is expected that Banerjee will heavily correct the cash surplus figure from Rs 80,000 crore, as presented by her predecessor Laloo Prasad Yadav, to a mere Rs 19,000
crore.

The other announcements likely are:
Dividend to government at Rs 5, 525 crore.
Depreciation account, Rs 5,300 crore.
Development plans, Rs 2,000 crore.
If other ancillary costs are added to the development plan of Rs 2,000 crore, the railways is most likely to find almost nothing in its surplus cash reserves of Rs 19,000 crore.

Shishir Chaurasia scooped this story for Business Bhaskar, a publication of the Dainik Bhaskar Group.