Railways to miss revenue target, looks to control costs

Faced with the double whammy of less-than-expected revenue and rising costs, each Railway Zone has been asked to prune expenditure by five percent and raise income by the same figure.

The Indian Railways stares at a revenue shortfall of over ₹12,000 crore in the current fiscal as against the budgeted revenue target, reveals Railways revenue data till December 2015.

In a letter to the General Managers of Railway Zones, the Railway Board’s Financial Commissioner Sanjoy Mookerjee has directed them to control costs by five per cent and increase revenues by five per cent. In 2016, the Indian Railways faces the “unprecedented challenge” due to revenue shortfall on one hand, and additional liability due to Seventh Pay Commission recommendations on the other, Mookerji’s letter read.

He added that recent moves such as second charting, higher Tatkal and cancellation charges are expected to increase earnings in the passenger segment.

Also, the move to permit the booking of tickets four months in advance instead of two since April 1, 2015 should also help in garnering additional funds this fiscal as the summer rush kicks in. Also the decision to have non-fare box revenue such as those from land licence fee, ticket-checking drives, parking, demurrage and wharfage charges are expected to further add to the kitty, the Finance Commissioner has noted.

The requested handholding by Finance Ministry through budgetary Support for Capital and financial assistance to take in the Seventh Pay Commission impact has not yet met expectations, he said.

To control costs, Mookerjee has called for increased focus on fuel optimisation and adhering to an earlier proposal regarding a ban on recruitment of non-safety and non-operating posts, including temporary and work charged posts.

Lower revised targets As per the revised freight traffic loading targets, the Railways is expected to see a revenue shortfall of about ₹9,000 crore this fiscal, purely on account of not meeting the freight loading target that it had projected for this year. By moving one million tonne of traffic, the national transporter earns revenue of ₹99–101 crore, according to data for April-November this year.

Against a gross traffic receipts target of ₹1,83,578 crore for the whole year, the Railways has mopped up ₹1,21,486 crore till December. In the remaining three months of the fiscal, it has to earn over ₹62,000 crore to meet the revenue target.

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