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generates a cash surplus before Dividend of Rs. 20,000 crore in fiscal* 2006-07 signifying an impressive Rs. 5300 crore in a year from Rs 14,700 cr. in the previous fiscal.

"The freight impact on industry is in the right direction and the general approach of the budget is to improve efficiency and output. The minister is taking innovative measures and if this tempo continues Railways will be one of the pillars of our growth in the coming years."  J. P. Choudhary, Chairman, CII-Railways Equipment Division

"The Railways are now working like a private sector corporation. We wish other public services, especially in the social sector, like education and health would follow suit," Habil Khorakiwala, President, FICCI

"The Budget proposal would give enough encouragement for huge capacity building of steel, cement and coal sectors." - Venugopal N Dhoot, President, ASSOCHAM

“The budget truly heralds a modern approach to managing the largest public service through use of technology and innovation.” - R.Seshasayee, President, CII

*India's fiscal year begins on April 1


Northeast Eastern
North Frontier
South Central
South Eastern  
Western Railway
East Central
North Western
East Coast
South Western
North Central
West Central
South East Central
Metro Railway


Wheeling on fast track

INDIAN Railways today is quite upbeat on closing the fiscal 2006-07 with a massive cash surplus of Rs 20,000 crore (before Dividend). And achieved that without imposing undue burden on the common man. In fact, he has bettered on fiscal 2005-06 that ended with a cash surplus of Rs 14,700 crore. No established financial management theory can explain how it happens. Railways minister Lalu Prasad has his own economics and management theory.

“I have a tremendous sense of pride and gratitude. Pride in the fact that the Railways are poised to create history by generating a cash surplus before Dividend of Rs 20,000 cr as against Rs 14,700 cr in the previous year. This is the same Railway that defaulted on payment of Dividend and whose fund balances dipped to Rs 359 cr in 2001,” he said in his 2007-08 Budget speech and attributed this huge success to his 1.4 million railway family members “who in the face of stiff competition have conquered all odds with an indomitable spirit displaying matchless zeal, vigour and teamwork.”

“By rendering an unprecedented surplus in spite of the reduction in passenger fares, we have disproved the myth that Railways were sinking in to a financial crisis due to social obligations. Our turnaround strategy based on a perfect blend of commercial wisdom and empathy for the people has made the Railways a centre of attraction for the world,” he said.

In the first nine months of the current fiscal year terminating on March 31, 2007 Railways have registered a record-breaking growth. The Passenger earnings have increased by 14 percent and other coaching earnings by 48 percent during April to December 2006. A historic increase of 17 percent was registered in both freight earnings and gross traffic earnings during this nine-month period. Based on the growth registered so far, the revised estimates for Passenger, Other coaching, Freight and Gross Traffic Earnings have been kept at Rs.17,400 crore, Rs 1,726 crore, Rs42,299 and Rs. 63,120 crore, respectively. Gross Traffic Earnings are likely to go up by 16 per cent in comparison with last year and exceed Budget Estimates by 5.5 per cent.”

Cash surplus before Dividend is expected to be Rs.20,063 crore Net Revenue is expected to stand at Rs 14,870 cr. The surplus, after payment of Dividend of Rs.3,579 crore and deferred Dividend of Rs.663 crore, is expected to be Rs. 10,627 crore. Indian Railways is poised to achieve an operating ratio of 78.7 percent during the current fiscal. This is “perhaps the first occasion in the glorious history of 150 years of Indian Railways when our fund balances would reach Rs. 16,000 crores and the Net Revenue to Capital ratio, an historic level, of 20 per cent. Indian Railways’ name would thus be included in the select club of Railways in the world, having an operating ratio of less than 80 per cent”, the Railways minister pointed out in his Budget speech.

Harnessing IT's potential

Railways will step up investments in IT projects significantly during the 11th Plan period beginning fiscal 2007-08 to harness the immense possibilities offered by IT in the interest of Indian Railways. IT applications will be deployed to increase passenger and freight earnings, improve the image of the Railways in the eyes of the customer, reduce operating costs, ensure effective utilization of human and physical resources and to help the top management in arriving at long-term policy decisions by developing MIS & LRDSS.

A commercial portal will be developed in the next 3 years for yield management, especially to attract traffic for returning empties and filling up vacant seats. All modules of FOIS including rolling stock maintenance and examination, revenue apportionment, crew management, control charting COIS etc. will be integrated and implemented in a time bound manner for completion by 2010.

Alongside ERP packages will be implemented in workshops, production units and selected zonal railways. A common website integrating the more than 50 different web-sites of Railways will be developed with built in facilities like e-payment and e-tendering.

For an integrated approach in IT, CRIS will be entrusted with coordination of all IT applications of the Railways and for development of a comprehensive vision on IT. CRIS will be developed as an autonomous and empowered organization, drawing officers from various Railways services. Indian IT companies have hoisted the national flag all over the world. We invite these companies to take part in various IT projects of the Railways under public private partnership.

The upbeat mood of the Railways is reflected in their targets set for the next financial year (2007-08). The target set for freight loading is 785 million tonne (MT) and freight output 516 billion tonne. Maintaining the double digit growth rate, the Budget Estimates for Freight, Passenger and other Coaching Earnings have been kept at Rs.46,943 crore, Rs 20,075 crore and Rs 2,200 crore, respectively. Gross Traffic Earnings have been projected as Rs 71,218 crore, reflecting an increase of Rs.7,248 crore on the Revised Estimates for the current year.

While Railways’ cash surplus before dividend is projected at Rs. 21,578 crore, the targeted Operating Ratio is 79.6 percent. Fund balances to end of the next financial year are estimated at Rs.16,170 crore. The memorandum on rate of dividend payable to General Revenues for 2007-08 has been submitted for consideration of the Railway Convention Committee. Dividend payable for 2007-08, assessed on the basis of the rate of dividend for 2006-07, is estimated at Rs.3,909 crore. In 2007-08, the Railways will not only meet this liability but will also discharge entire remaining deferred dividend liability of Rs.664 crore. In the Plan outlay for the next year, Rs.17,323 crore will be provided from internal resources.

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