The Railways may restore the allowances of its 12 lakh employees that were withheld due to the Covid-19 pandemic, with the national transporter proposing to allocate extra 12 per cent of funds towards staff cost in the coming fiscal.

Accordingly, the Railways has allocated ₹93,345 crore for staff cost the next fiscal, up almost ₹10,000 crore, compared to the current year.

For the next year, ordinary working expenses (OWE) are slated at ₹1.54-lakh crore, only 2.87 per cent more than FY20. The OWE of Indian Railways largely comprises staff cost, fuel cost and lease payments to Indian Railway Finance Corporation (IRFC), the borrowing arm of Indian Railways.

The higher allocation for OWE – of ₹ 14,000 crore against 2020-21– is done “mainly to cater for allowances…There is a contemplation that the Dearness Allowance (that was held back last year) will be replaced,” said Naresh Salecha, Financial Commissioner, Railway Board, in a press meet on Tuesday.

For this year, marred by Covid-19 prompted lockdowns, Salecha expects the OWE to be limited to ₹1.4-lakh crore, down 14 per cent year-on-year.

The national transporter – which has a large pool of pensioners – will also have to bear its pension expenses from its revenues. According to Salecha, as the revenue projections went off track due to Covid-19, the Railways was unable to meet the pension expenses. It had a special arrangement with the Finance Ministry to have a loan which the Ministry will repay over the next few years.

Pension expenses

The Ministry expects its pension expenses to be at ₹51,000 crore this year and ₹54,000 crore next year. With this, Indian Railways will continue to be the only Ministry to bear both its staff and pension expenses from its revenues.

The ₹79,398-crore special loan for Covid-19, which the Railways has taken from the Finance Ministry, has about ₹29,000 crore portion with interest, according to Salecha.

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