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Nirmala Sitharaman’s so-called budget with infrastructure thrust is a myth and if you break the seal of fine prints in comparison with those of the past you get many revelations.

As for as the rail infrastructure is concerned it has been underinvested and under total neglect either with regard to renewal of existing assets or augmentation of existing capacity. Mr.Suresh Prabhakar Prabhu as the then Minister of Railways in his budget speech for 2015-16 announced that the infrastructure has been neglected very badly and needs to be strengthened and expanded in order to increase the average speed of goods trains from 25 kmph to 50 kmph and of passenger trains from 50 kmph to 80 kmph and to attain 95% punctuality. He also stated that the railway’s share of freight in the country must be increased from 29% to 45%. He reported in his white paper on railways that there were 5300 kms of track arrears for renewal which is the main cause of derailments and accidents. According to the paper, 4500 kms of the track becomes due for renewal every year but only 2500 to 3000 kms are renewed every year. He, after winding up the 12th five-year plan midway, announced a plan for 2015-2019 with an outlay of Rs. 8.56 lakh crore to full fills the above objectives. Accordingly, every year starting 2015-16, Rs 1.71 lakh crores should have been spent. But the following were the ‘Actuals’ as per budget documents:

Actuals Rs in Crores93519109934101985133376148064

After the merger of rail budget with General Budget since 2017-18 Mr.Arun Jaitely became the custodian of railways and continued the same objective. After the Interim Budget by Piyush Goel before 2019 parliament election in July 2019 Nirmala Sitharaman as finance minister announced in that budget that railways needs an investment of 50 lakh crore rupees during 2018-30 ie 12 years meaning Rs 4 lakh crores rupees every year. But 2019-20 actuals were only Rs 1.48 lakh crores. She did not present the honest appraisal of 2015-19 plan of 8.56 lakh crore investment for which only Rs 5.86 lakh crores had been spent in these five years. Even this figure is not to be relied upon as the Extra Budgetary Support figures are not possible to be verified. Especially the investment from PPP  has no record to prove the figure as they need not be tallied.       

In 2020-21 budget speech she announced that the goal is National Infrastructure Pipeline (NIP) announced by PM Narendra Modi in the independence day speech. In the budget speech, she said it is for 5 years. But the NIP published by the Finance Ministry on 31st December 2019 proposed Rs. 103 lakh crore plan over 6 years for all infrastructure. According to the NIP Railways plan is for Rs 13.69 lakh crore. As the private is not forthcoming for investment in rail infrastructure despite many concessions the NIP envisaged 87% of this fund ie Rs 11.90 lakh crore to be invested by the central government through general budget support. But for road sector centre will invest only 25% according to NIP.

The following are the total  plan requirement year-wise, along with the budgeted plan out lay, Rs cr

Plan on NIP Rs1,33,2322,62,5103,09,3602,74,1812,21,3691,67,870
Plan Outlay(budget)1,48,0641,61,0422,15,058abandonedabandonedabandoned
87%of NIP1,15,9112,28,3831,87,100abandonedabandonedabandoned
Budgetary Support6810429000(Revise from 70250(BE)1,07,000   

The budget support includes Rs 13000 crores road safety fund collected from road cess on diesel and transferred to railways for rail safety fund and Rs 5000 crore committed by the central government for national rail safety fund. If this Rs 18000 crores are deducted from the above budget support it would mean far less for NIP than the 87% commitment.

It is well understood that the NIP is still halfway through. But Nirmala Sitharaman in this budget 2021-22 has abandoned the NIP and has proposed an NRP, the National Rail Plan to be executed in 30 years, between 2021-51 with an investment of Rs 38.5 lakh crores. Astonishingly the objectives are the same as in 2015-16: to increase the freight share from 26% to 45%; to increase the average speed of goods trains to 50 kmph from 25 kmph and passenger trains from 50 kmph to 130-160 kmph. Even the track renewal arrears have not been wiped out. At present there are 11000 kms track renewal arrears. No increase in the physical output of new lines, doubling etc. The following table shows how there has been no specific improvement despite their mega announcements.


For the next fiscal 2021-22 the capex of Rs. 1.07 lakh crores has been budgeted which is widely appreciated. There is another revelation too. For the current fiscal the revised estimate of Rs 29000 crores is Rs 41000 crores less than the budget estimate of Rs 70250 crores. If it is to be made good in 2021-22 the additional amount of Rs 60000 crores of Rs. 1.07 lakh crore is far less than the past allocations. Apart from this Rs 18000 crores is to be taken for rail safety fund. Where is the extra effort for the proposed NRP. For 2021-26 an amount of Rs 5,81,821 crores out of Rs. 38.5lakh crores is to be spent ie Rs. 1,17,364 crores annually.

Even they have not met the safety target. After lot of derailments and accident deaths, a national rail safety fund was proposed named Rashtriya Rail Samrakshana Kosh RRSK. Rs 1lakh crore has to be spent in 5 years ie Rs 20000 crores a year starting 2017-18. According to CAG, this is a fund created from the same existing railway funds like rail safety fund obtained from Diesel cess as a share of railways with Rs 10000 crores and Rs 5000 crores from Depreciation fund of railways both have been part of railway sources. The only infusion is Rs 5000 crores from GBS. This fund has to be used for the renewal of existing assets like track renewal, signal renewal, bridge repair etc. But even this target was not met. According to the CAG report and the budget documents, the following was the actual expenditure met by RRSK in place of Rs 20000 crores each year:

           Year                   Rs cr
2017-18           16090
2018-19                18015
2019-20                15200
2020-21                17000

The next revelation is that of unprecedented adverse operating ratio which has not been brought in the overview of railway receipt and expenditure. The Operating Ratio (OR) is the percentage of expenditure on the income. The overview of the railway receipt and expenditure shows that the OR in 2019-20 was 98.36% and 2020-21 as 96.96% RE. A question arises as to how when the Gross Traffic Receipt is Rs 79,304 cr less in the revised budget from the budget estimate almost the same OR is possible in the revised budget. She has shown Rs 75,604 crore less in the expenditure. Strikingly she has shown pension appropriation as only Rs 523 cr as against the budget estimate of Rs 53,160 cr. Strikingly for 2019-20 also the actual appropriation on pension is shown as Rs 20,708 cr. When we go into the Demands for Grants presented for voting in the budget 2021-22 the actual for 2019-20 is shown as Rs 52,712 cr as against Rs 20,708 shown in the over view. The revised estimate for 2020-21 is shown as Rs 54,766 cr as against Rs 523 cr in the overview. The cat is out of the bag in the footnote of the over view. According to the footnote, the real OR for 2019-20 is 114.19% and for 2020-21 it is 131.49%.

“Due to Covid related resource gap, Railway appropriated/estimated to appropriate less than required amount to Pension Fund in 2019-20 and RE 2020-21. With required level to appropriation to Pension fund from Railway Revenues in Actuals 2019-20 and in RE 2020-21, the Operating Ratio would be 114.19% and 131.49% respectively”

Therefore railway finances are bad and cannot create resources for large scale investment needed to NIP or NRP. As planned in NIP, 87% fund has to come from the general budget support. Then only the infrastructure can be strengthened for safety and expanded to meet the growing demand. As per the CAG report, the proposed LIC  loan of 1.5 lakh crores did not come as IRDA  has restrictive investment regulation. In the last 4 years, only Rs 16,200 cr came from LIC. Railways had to take short term market loan of Rs 49,000 cr at a higher rate of interest. As seen from the experience this government has been neglecting the investment and the infrastructure development has been very badly affected. The NRP also says that the private will not come for investment in infrastructure. It also says that government also does not have money to invest. China invests 11 times we invest. Their speed is 350+kmph  for goods and 400 kmph for passenger trains because government invests in railways

Neglecting the infrastructure development as per NIP, the government implements only its privatisation recommendations. 150 passenger trains to be privatised by March 2023 and 500 trains by 2025. By 2025 30% goods trains to be privatised. NRP says by 2031 there will not be Indian Railways run goods trains and entire goods traffic will be privatised. 90 important stations have been listed in NRP for privatisation before 2031. Dedicated Freight Corridor also will be opened for private. Nirmala Sitharaman has announced in the budget that even the Dedicated Freight Corridor corporation will be monetised and disinvested and handed over to private when it becomes operational. Already Container Corporation is listed for strategic sale. It will be sold in 2021-22 as per the budget announcement. The railway is cross-subsidising passenger loss by goods earnings. As per the CAG report, in 2018-19 railway met a loss in passenger segment an amount of Rs 46,000 cr. It earned a profit of Rs 45900 cr in the goods segment. It cross-subsidised the passenger loss. In UK and Russia central government meets the passenger loss according to NRP. In the absence of government subsidy if the goods trains go to private the railway will not be able to give passenger subsidy. It cannot pay salary and pension. The NRP says the only loss-making second class passenger segment will be with railways. Therefore all profit to private and loss to the government.

Finally the infrastructure development will face serious problems. Privatisation at the cost of neglect of infrastructure development.

Nirmala Sitharaman has shown in the budget that there will be 14.4% GDP nominal growth in 2021-22. Railways’ targets do not match this. A perusal of Statement of Railway Receipts and Expenditure available on the railway website shows that even the level of 2019-20 is not expected in terms of net tonne kilometers. According to the statement, the goods traffic is expected to grow a meagre 1.03% over 2019-20 and passenger traffic 4.6%. Even these figures are not reliable when we find the comparison of fuel expenses. Without fuel, trains won’t run is common knowledge. The fuel expenditure will be only 82% of 2019-20 mere Rs 1200 cr more than the revised estimate of 2020-21 the pandemic period.

Year2019-202020-21 BE2020-21 RE          2021-22 BE
Goods million ntkm7,07,6657,18,5486,60,4927,14,961
Passenger million pkm10,50,73812,10,5871,18,92810,99,127
Fuel expenditure Rs crores28,99929,85822,65123,815

As for as passenger trains are concerned, railways are not interested in running all the trains in the time table. Now they are running only 60% of the trains according to railway minister. They call them cloning express. Though they are the regular trains they are not called in their name and number. They have simply removed the first number of the regular train, add 0 in its place and call it a special train. They use the pandemic as an opportunity to run only profitably. As per CAG recent report, in 2019-20 the passenger loss is Rs 46,000 cr. It was cross-subsidised from goods earning of Rs45900 cr. As they expect part of goods train also will be privatised this will not be possible. Therefore they are preparing for the virtual scenario of privatisation of goods and passenger trains. If private passenger trains have to run in the existing congested routes in the scenario of neglect of strengthening and expansion of rail network, not all the timetabled trains can run to give a level playing field to the private operators. One of the conditions is that there should not be any IR train one hour before and after their trains not even from another terminal. That is why they do not intend to operate all the passenger trains. Therefore expectedly fuel expenditure will be far less than that of the revised level of pandemic period.

They also do not intend to run suburban trains at the level of 2019-20 as the loss in this segment is Rs 6000 cr. They don’t add general compartments either. As per NRP the Russian and British passenger segment loss are met by the respective governments even though most of the British passenger segment is private. There is a saying in Indian Railways that as we increase the passenger service so the loss will increase. As the government feels that the user pays, they fleece the reduced passengers to meet the loss. Extract the maximum from the minimum is the philosophy. They have abandoned the philosophy of social service obligation. In these special trains, fare is more and there are no concessions like senior citizen, patients, youth, journalist, kisans etc. They virtually prepare the railways ground for privatisation of goods and passenger trains.

Railway unions should unite the workers and go to people for bigger struggles along with people to save railways and the nation.

R. Elangovan is Vice President, Dakshin Railway Employees Union.

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