Railways to move finance ministry on pay commission impact

The Union railway ministry is likely to move the finance ministry, seeking its intervention to minimise the impact of the sixth pay commission by at least Rs30,000 crore.

Ministry officials concede that the outgo of Rs55,000 crore on arrears, pay and pensions since 2008, has even dented its short- term infrastructure plans envisaged in the Vision 2020 document.

A railway ministry source said, “We need a reprieve on the pay commission outgo front. The government should consider pitching in for the arrears portion of the pay commission impact worth Rs30,000 crore. The ministry will take it up with the finance ministry.” The government does it for all the ministries and a mechanism should be set up for the railways as well, the official added.

In addition to shaving off the reserves of the railways, the outgo has even impacted the short-term infrastructure boost planned by the railways.

As per the vision 2020 document, the ministry-planned construction, of new lines connecting 1,000 km, electrification spanning 2,000 km, bidding out of 12 world-class stations, and gauge conversion of 2,500 km by 2012, has not yet been taken up. The official agreed that the railways do not have funds for these schemes as of now.

The short-term plans also include procurement of 33,909 wagons, 555 electric locomotives, 6,912 passenger coaches. The total investment required is Rs1,40,748 crore, compared with just around Rs5,508 crore currently available with the railways.

In addition to the pay commission liability, the railways have suffered losses worth around Rs8,000 crore on various accounts. On account of loss of iron ore loading in Orissa and Karnataka, the railways has lost Rs2,500 crore this fiscal. Maoist activities, which led to the shutting down of operations in certain sectors, coupled with the Gujjar agitation, accounts for another Rs1,500 crore jolt. Multiple diesel price hikes has taken a toll to the tune of Rs1,000 crore, among others.

According to the railway ministry, in the absence of the pay commission impact, post-budget hikes and factors beyond the control of the railways, the resources that would have
accrued to the railways would be to the tune of Rs62,000 crore between 2008-2011, an amount that would have been used to initiate the short-term 2020 plans.