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.
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
P. Choudhary, Chairman,
CII-Railways Equipment Division
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
Budget proposal would give enough encouragement for huge capacity
building of steel, cement and coal sectors." - Venugopal
N Dhoot, President, ASSOCHAM
budget truly heralds a modern approach to managing the largest public
service through use of technology and innovation.” - R.Seshasayee,
fiscal year begins on April 1
Wheeling on fast track
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.
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.”
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.
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.”
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
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.
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.
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
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.
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
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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