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Updated: December 18, 2009 15:02 IST

White Paper shows railways below par during Lalu era

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Railway Minister Mamata Banerjee tabled a White Paper on railway's financial health in the Lok Sabha on Friday.
The Hindu
Railway Minister Mamata Banerjee tabled a White Paper on railway's financial health in the Lok Sabha on Friday.

Railway Minister Mamata Banerjee tabled a White Paper on railway's financial health in the Lok Sabha on Friday. Contrary to the tall claims of the former Railway Minister Lalu Prasad, the growth is "below par," claims the report.

A status paper on the functioning of railways, presented in the Lok Sabha on Friday, punctured former Railway Minister Lalu Prasad’s tall claims of record profit and held that its performance was “below par” during his tenure.

The performance of railways was “below par” during 2004-05 to 2008-09 when the RJD chief was at the helm of affairs, the White Paper laid by Railway Minister Mamata Banerjee claimed.

“Analysis of the overall growth of railways during the period shows that the performance was below par if the normally accepted growth elasticity of 1.25 is reckoned,” the report, tabled amid din, said.

Mr. Lalu was present in the House when the report was laid.

Noting that losses from passenger operation was almost Rs 14,000 crores in 2008-09, the document said a new form of presentation of accounts was started during the Lalu regime which projected a concept of cash surplus before dividend which made the Railway finances “look good“.

If these presentation changes had not been done, the accumulated surplus of Rs 89,000 crores during the five-year period would come down to Rs 39,500 crores.

This reduction also includes the impact of Pay Commission arrear payments which have been taken to the years in which it actually accrued, the 70-page document said.

Seeking to give a lie to Mr. Lalu’s claims about his period being the golden era of the Railways, the White Paper said the best period financially in the last 20 years was 1991-96 (when C.K. Jaffer Sharief was Railway Minister) and “not the last five years.”

Dismissing the White Paper as "a black paper and no paper at all", Mr. Lalu told reporters later that his claims of record profit were correct and asserted that "my tenure was the best period and there was no dispute on my earnings".

He said some officers appear to have misled Ms. Banerjee and she should find out who are they.

After taking over the reins of railways in June this year Ms. Banerjee had announced that she would bring out a White Paper on railway's financial health as it was not that good as projected.

Mr. Lalu had virtually challenged the Railway Minister after her claim.

The analysis was made by a consultant brought into study the financial performance and accounting systems of Railways.

Stressing that the Railways contribution to National GDP remained "stagnant" at 1.18 per cent during the period, the White Paper said while there was good growth during this period, it was mainly propelled by the boom in the economy.

Besides, it said several measures taken including increasing carrying capacity of wagons, reducing terminal detention and increasing maintenance cycles helped in accelerating the growth in freight traffic.

It said freight earnings grew by 14.11 per cent Compounded Annual Growth Rate (CAGR). Freight rates were substantially increased during the period including 44 per cent increase in foodgrains and 35 per cent in fertilisers.

The White Paper said passenger earnings grew at a CAGR of 10.52 per cent.

Though there was no increase of passenger fares, earning per passenger kilometre grew at compounded rate of 1.27 per cent mainly because of some increase in fares of upper classes and high tatkal charges.

Two accounting changes were made during the five-year period with appropriate approvals, it said adding that the changes had the impact of increasing the cash surplus before dividend.

Besides, it noted that the consultant has come out with certain important suggestions to improve the presentation of accounts and transparency.

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