Rail Not in Loss, Users Fund
By Shivaji Sarkar
Some debate or discussions never end. So is the rail subsidies, that rail knows has never been offered. But now someone in Parliament surprisingly says that railways subsidises 46 percent rail fares of all classes. He has not given any details. He wants that since he has the courage to say in Lok Sabha it should be accepted as Gospel truth. Indian media has in reality done it and have been giving wide publicity to it without scrutiny.
Not surprised. Quite some time back did a study and found media does not act on its own. All uses media as a “tool”. The media does echo whatever one has said. That is also called propaganda. It has become easy and scrutiny not easy as all documents are kept concealed from the access of the common user got a decade. Even parliamentarians like Basudev Acharia (CPI-M), who knew the rail like his palm or Aravinda Ghosh, the journalist were never charitable as they had the facts.
None has challenged the fallacious statement and the person has got uninterrupted publicity. Some connoisseurs on the social sites have, however, stated that never since the inception rail has given a paisa as subsidy. Railways subsists itself and it does not get a paisa from the government. There is no scope for a subsidy.
Why should one make such an unsubstantiated statement on the floor of the house? At least the person could have seen various details present on various books, files and sites. This is not the first time that such claim is made. In 2019 too it was said that Rs 35000 were rail subsidies. It was later refuted.
Presenting the 2019-20 Interim Budget, Piyush Goyal said that capital expenditure is pegged at Rs 64,587 core, a mere rise of Rs 15,687 crore over Suresh Prabhu’s figures. It means even after the merger of the Rail Budget with the Union Budget, the Railways is paying for all of it, which only means that the Centre does not have to bear the cost of investment in railways. The subsidy is a myth.
Why are the people being implored to give up and for whom? The railways misstatement also has a cost. This calls for transparency and a national debate. The CAG noted that about Rs 14,000 crore surplus known in the 2018-19 budget is incorrect.
The Railways has a system of cross-subsidy. Often it is said that passenger earnings are not enough, so freight earnings are used to subsidise it. This is happening since 1950s and even during the days of private East India Railway or Bengal-Nagpur railway or even some of the princely sae narrow gauge trains. Even Suresh Prabhu’s budget or Piyush Goyal’s or Nitish Kumar or Mamata Banerjee in the yore or Ashwani Vaishnav, who was with the Siemens selling rail engines and other equipment is based on this premise.
This again proves that except for the bureaucratic jargon there is no loss, and if at all, it may be minimal. There is no loss on premium trains including that to Vaishno Devi or T-18 –Vande Bharat or the Rajdhanis.
And why 1300 stations being demolished and for whose benefit? Why is this extra expenditure?
No one stated about the extortion in the name of dynamic fare (DF) that has jacked up basic fares many times. The railways are silent on how much extra it earned for rendering no service by inflating fares and subsuming full fares on waitlisted tickets, causing inhuman troubles to the genuine passengers.
No Nirmala Sitharaman or Vaishnav stated that in the budget. It gives astounding figures of fare collection, certainly due to DF.
Bereft of media attention or scrutiny, the regime could bask immediately in the glow of a “massive” increase in outlay without delivering anything substantial at all. This tested model was applied to the railway finances.
Railways gives Rs 56,993 crore subsidy on tickets every year, says Vishnaw and has record earnings of around Rs 2.56 lakh crore in 2023-24 from freight and passenger movement, which is its highest-ever revenue earnings. Its earnings totalled Rs 2.4 lakh crore in the previous year. And the Cnetre has given nothing. Vaishnav does not explain how the subsidy is calculated.
Today, Indian Railways carries 22.2 million passengers daily (almost equal to the population of Australia) in its 13,229 passenger trains across a network of 67,368 km through the length and breadth of the country. Additionally, another 9,221 freight trains carry more than three million tonnes of freight daily. The freight earns IR is currently one of the four railway systems in the world with an annual output of more than one billion tonnes of freight. With such a humongous transport output, the cost of its various services must be carefully calculated for the industry to maintain a robust financial health.
Undoubtedly, there is no subsidy at any level. But railways launched well-planned propaganda on its tickets and other instruments cajoling the people to give up “subsidy”, which is not there. It causes severe loss to senior citizens
In monetary terms neither the railways nor the government is having any loss but it is silent about the extra earnings from DF and harassment to the travellers. Why should not railway refund unconfirmed waitlisted ticket fare with a minimum interest rate?
According to Vaishnaw, the Railways have actually borrowed less than what was provisioned for. Borrowings to fund capex by public enterprises and SPVs (IEBR) was “just around” Rs 20,000 crore in FY24 (actuals); with total capex was Rs 2,60,000 crore. “In FY25, our borrowings are far less than FY24 actuals, and there is better Budgetary” support – the highest ever. For example, the Extra Budgetary Resource or borrowings have come down from Rs 41,000 crore in FY23 to Rs 17,000 crore in FY24. It will be brought down further to ¹ 10,000 crore this year. So this is a good sign,” he explained. He is shy of admitting that there is no subsidy by railways or the government.
Incidentally, the Indian Railway Finance Corporation (IRFC) will abstain from borrowings, for the second consecutive year in FY 2025. In FY2024, the organisation did not raise funds, while in FY23 it raised over ¹ 30,000 crore, as per the Budget documents. Shows rail finances are in good health.
The detailed statements reveal the reality. The railway services are becoming deficient with higher DF but also higher actual savings. Let us admit, Indian Railways do not give a paisa as subsidy. — INFA