Though the Railway authorities may deny any kind of manipulation in ensuring an operating ratio better than the Budget estimates, the fact remains that the finances of the Railways are far from rosy, and continue to be a matter of serious concern. The question is whether the Railways has slid into the red.

Railway Minister Mamata Banerjee estimated that the current financial year 2010-11 would end with a surplus of Rs. 4,105 crore and an operating ratio of 92.1 per cent as against the budget estimate of 92.3 per cent.

Both Ms. Banerjee and Railway Board Chairman Vivek Sahai denied there having been any kind of manipulation, claiming that the operating ratio was the outcome of the hard work put in by the staff and the changed policy of freight pricing.

The documents reveal otherwise. As against the budget estimate of Rs.6582.73 crore to be paid in the form of dividend to the union government, it has now been revised to Rs.4,891.63 crore

Equally distressing is the downward revision of the Appropriation to Depreciation Reserve Fund (ADRF) from the proposed Rs.7.600 crore to Rs. 5,700 crore. Even under the Development Fund head, it has been revised downward by 442 crore to Rs.2,358 crore from the budget estimate of Rs.2,800 crore.

The total value of the downward revision under these three crucial heads work out to Rs.4,033 crore, which is close to the figure of Rs.4,105 crore shown as surplus. Of course, the surplus is projected on the basis of higher earnings in the remaining period of the current year from both passenger and freight trains.

It is anybody's guess as to where the finances stand. It is, as of now, a break-even situation at best. The real picture will emerge only after March 31, when the accounts are settled finally.

Mr. Sahai denied that the downward revision under the three heads would, in any way, impact the operating ratio. He attributed the improved operating ratio to the higher earnings from coal transportation.

The Railways took advantage of the rise in international iron-ore prices arising from the ban on exports in India. Later, they increased the freight charges by $40 per tonne — Rs. 1500 per tonne — in January.

Mr. Sahai said that the Railways would use this strategy in the coming financial year too.

Mr. Sahai's admission is a clear indication that freight charges had been increased to save the day for the Railways.

Both Ms. Banerjee and Mr. Sahai claimed that the bad phase was over and the Railways would grow from strength to strength.

Yet, only Rs.7,000 crore was proposed for the ADRF in 2011-12, which was lower than the Rs.7,600 crore proposed in 2010-11.

For the Development Fund, the proposal is for Rs. 2,400 crore during 2011-12, which is lower than the proposal for 2010-11 of Rs.2,800 crore but slightly higher than the revised budget proposal of Rs.2,358 crore.

But as in the last year, no money has been spared for the Railway Safety Fund even in 2011-12. That is how serious the Railways are about safety; this only exposes its pathetic financial condition.

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