Union Railway Minister Suresh Prabhu on February 25, 2016 presented the Railway Budget 2016-17 in the Parliament. This was the second railway budget for Suresh Prabhu and third rail budget of the Prime Minister Narendra Modi-led NDA government. Presenting his second rail budget, Union Railway Minister Suresh Prabhu exhorted on government’s objective of making railways an engine of employment generation and increasing customer satisfaction by focusing on the ongoing projects rather than announcing new ones. He also highlighted government’s plan to improve passenger amenities at station and on board.
Financial Performance 2015-16
- 2015-16- Savings of ? 8,720 crore neutralizing most of the revenue shortfall, expected Operating Ratio 90%;
- 2016-17 Targeted Operating Ratio—92%, restrict growth of Ordinary Working Expenses by 11-6% after building in immediate impact of 7th Pay Commission, reductions planned in diesel and electricity consumption, Revenue generation targeted at ? 1,84,820 crore.
- Net reduction in Gross Traffic Receipts by ? 15,744 crore in RE 2015-16 compared to the BE target of ? 1,83,578 crore. Passenger earnings scaled down keeping in view the persistent negative growth trend since 2013-14 both in the suburban and non-suburban non-PRS segment of travel.
- Freight earnings impacted mainly on account of low demand from the core sector resulting in resetting the target in R.E. 2015-16 to ? 1,11,853 crore.
- Stringent economy and austerity measures adopted to contain the Ordinary Working Expenses (OWE) due to which budgeted Ordinary Working Expenses of ? 1,19,410 crore decreased in the Revised Estimates 2015-16 to ? 1,10,690 crore e. by ? 8,720 crore.
- BE provided for an appropriation of ? 34,900 crore to the Pension Fund. However, based on trend, the pension outgo moderately decreased to ? 34,500 crore in RE.
- Internal resource generation diminished and appropriation to DRF moderated to ? 5,500 crore in RE from the BE 2015-16 provisioning of ? 7,900 crore. Excess of receipts over expenditure in RE 2015-16 stands at ? 11,402-40 crore.
- Plan size for 2015-16 is currently estimated at 1,00,000 crore e., the BE level.
Budget Estimates 2016-17
- The intention to improve revenues and ensure appropriate investments which can continue the road-map of decongestion and enhance line-capacity enhancement as detailed in 2015-16. The focus is on enhanced CAPEX with a mix of various sources of funding in order to ensure that the projects are given assured funding.
Gross Traffic Receipts kept at ? 1,84,820 crore. Passenger earnings growth has been pegged at 12-4 % and earnings target budgeted at ? 51,012 crore. The freight traffic is pegged at incremental traffic of 50 million tonnes, anticipating a healthier growth in the core sector of economy. Goods earnings are accordingly proposed at ? 1,17,933 crore. Other coaching and sundries projected at ? 6,185 crore and X 9,590-3 crore respectively.
OWE provides for the implementation of the 7th CPC.
Pension outgo budgeted at ? 45,500 crore in 2016-17. Higher staff cost and pension liability impacts the internal resource position of the Railways. Accordingly, appropriation to DRF from revenue placed at ? 3,200 crore and that from Production Units at ? 200 crore. A withdrawal of ? 3,160 crore from DRF on net basis proposed though the gross expenditure to be met from DRF in the Annual Plan estimated at ? 7,160 crore. ? 5,750 crore proposed to be appropriated to the Capitalfund. With a draw-down of ? 1,250 crore from previous balances in the fund, plan requirement of ? 7,000 crore for repayment of principal component of lease charges to IRFC met.
Railways are preparing a Plan size of ? 1,21,000 crore in 2016-17.
|IBB B B B “B||ns|
|Gross Traffic Receipts||1,56,711||1,83,578||1,67,834||1,84,820|
|Total Working Expenses||1,42,996||1,62,210||1,50,690||1,69,260|
|Net Railway Revenue||16,838||25,076||19,898||18,211|
|Dividend Payable to General Revenues||9,174||10,811||8,495||9,731|
|Source: Railway Budget 2016-17 documents||KBK Infographics|
|Revised Budget 2015-16 2016-17|
Highlights of the Railway Budget 2016-17
Theme of the Budget
- Overcoming challenges – Reorganize, Restructure, Rejuvenate Indian Railways : ‘Chalo, Milkar Kuch Nay a Karen’
- Three pillars of the strategy e. Nav Arjan- New revenues, Nav Manak- New norms, Nav Sanrachna- New Structures.