New Delhi: Cash-strapped railways on Friday said it was optimistic about achieving its earning target for the current fiscal in view of appreciable freight loadings in fertiliser, foodgrains and parcels besides increased earnings from advertising.
“We are confident of achieving earnings targets of Rs 94,765 crores due to the positive growth in parcel loadings and in fertiliser and foodgrains among others,” Railway Board chairman Vivek Sahai told PTI.
Railway finances have come under strain due to the implementation of the Sixth Pay Commission report.
The ban on illegal mining activities in Orissa and Karnataka has also affected railways’ revenue earnings from freight. Railways lost more than 13 million tonnes in iron ore or Rs 2,500 crores due to fall in loading in these states.
The Naxal menace also hampered its revenue earnings with Rs 800 crore being lost on account of shortfall in coal loadings.
Sahai said implementation of the Sixth Commission report had a major effect on railways leading to its current financial state when operating ratio is 95.3%. Operating ratio is the sum spent to earn Rs 100.
“The increasing operating ratio is a temporary phenomenon and would come down like it had happened after the implementation of the Fifth Pay Commission,” he said.
After the Fifth Pay Commission was implemented, the operating ratio had also gone up to 90.5% but came down to about 75.9% in 2007-08.
Sahai said in 2008-09 railways had to pay 40% of the arrears to its employees while implementing pay panel recommendations which pushed the operating ratio up to 90.5%.
In 2009-10, the operating ratio went up to 95.3% as 60% of the arrears were paid.
Railways with 14 lakh employees and 12 lakh pensioners had to dole out Rs 55,000 crores for implementing the pay commission report, including Rs 16,400 crores on account of pension liabilities from its internal resources.
Railways salary and pension liability after the Sixth Pay Commission is Rs 15,000 crore per annum. It also faces the additional burden of shelling out Rs 1,500 crores for its employees under modified assured career progression scheme.
The Gujjar agitation coupled with dense fog also added to the woes of Railways.
“The blockade of rail track due to the Gujjar agitation affected train operations and the fog situation also compounded the problem. We lost about Rs 180 crores due to this,” said Sahai.
Referring to the escalation in diesel price, Sahai said the extra burden of Rs 1000 crores due to the hike in diesel prices also impacted the Railways financially.
“Though these factors were beyond railway control, suitable steps are being taken to improve the earnings and control the expenditures”, he said.
Sahai exuded confidence that earning targets for the current fiscal would be achieved as the PSU is a robust organisation and will meet the challenge posed by the payments of huge arrears.