Railways may use UID to target passenger fare subsidies

Mamuni Das Railways | Updated on March 20, 2011 Published on March 20, 2011


We are working with the UID project. The Railways will be one of the registrars. With more agencies helping to identify the below poverty line population, the subsidised fare structure can be much more targeted.

Following the implementation of the Sixth Pay Commission recommendations, the surplus of the Indian Railways' had dipped to below Rs 1 crore in 2009-10. The challenges for the Indian Railways' financial health have been compounded because, to improve revenues, it has to depend primarily on freight services. Passenger services, after all, cannot be touched because of political compulsions. Mr Samar Jha, Financial Commissioner, Indian Railways, spoke to Business Line on a wide range of issues. Some of his responses (such as ‘watch this space') could be attributed to his journalistic slant, given that he started his career as a sub-editor in ‘The Statesman' in the 1970s.


The recently published figures show that in fiscal 2009-10, Indian Railways' actual surplus dipped to a mere Rs 75 lakh, compared to a revised estimate of Rs 951 crore provided in Budget. How do you explain that?

We survived the fiscal 2009-10 by drawing down from the fund balances. Actually, we had some major shocks, suddenly Rs 900 crore extra debit came on account of pension payments (following the Sixth Pay Commission). But we kept our nose above water because of fund balances. We paid the entire dividend to Government.

Has anything been finalised on the size of the non-lapsable fund being sought by the Railway Ministry from Government? Just before the Budget, we had got an in-principle clearance from the Prime Minister to announce the non-lapsable fund, called Pradhan Mantri Rail Vikas Yojana. Now we have to work out the details. In the Vision 2020 document, we suggested the creation of an accelerated rail development fund of about Rs 5 lakh crore..

Will it be purely for rail link projects?

Likely. Socially desirable projects don't get funds. So, we must create a fund for connectivity.

That is why the Government itself is funding connectivity projects for the capitals of the North-Eastern States, and the Kashmir rail link projects.

There are investor concerns on the pace of bids for your PPP projects. GE's worldwide head Mr Jeffrey Immelt recently used the word “frustrating” when asked about the pace of bidding in locomotive projects….

We are moving forward. Only thing is that an RFP (request for proposal or financial bid) document had been prepared, during which a lot of changes took place compared to what was cleared by the Cabinet. An Executive Directors committee was appointed to take a fresh look at the issue. They flagged certain issues…It was technical, so an Advisors' committee was again appointed to convert the recommendations into simpler language.

Then the Board went through the latter's report and agreed on certain things. We now need to take a call on if there should be changes; if yes, what should they be; do we need to go to the Cabinet with the new financial bid? We feel we will be able to tackle this. Now fresh dates have been announced for invitation of bids in May.

The wage bill for the Railways as a percentage of working expenses, is over 55 per cent, which is extremely difficult for any organisation to handle. You have to improve your topline significantly. How do you propose to do that?

We are working out terrific strategies for improving the topline, which I just cannot share with you now. Just watch this space (smiles).

You have been increasing your freight charges to improve the topline…

Not really. Just look at how we are focusing on commodities that give us higher earnings per tonne, how much iron ore we have loaded...

What about passenger service losses? With coaching losses touching Rs 20,000 crore, how long will you subsidise passenger services?

Even now, 80 per cent of the population cannot afford this fare! If the Government can subsidise kerosene, diesel and fertiliser, why not rail passenger transportation?

But, shouldn't you have more targeted subsidisation?

Well, we are working with the UID project. The Railways are going to be one of the registrars. The UID will be just a number, but subsequently there are likely to be agencies that will help identify the below poverty line (BPL) population. Then, the (subsidised fare) structure can be much more targeted. But, as of now, nothing has been worked out.

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Published on March 20, 2011
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