Date:07/07/2004 URL: http://www.thehindubusinessline.com/2004/07/07/stories/2004070701981100.htm

Back `Our projections are realistic'

G. Srinivasan

"The very fact that we have reduced our passenger earning from the Interim Budget shows that we have pegged it at the most realistic level. Our actual earnings during last year registered a growth of 5.26 per cent and we have fixed it up at more or less the same level... We have to go in for marketing operation since there is enough scope to exploit the market and increase the earnings."

Mrs Vijayalakshmi Viswanathan, Financial Commissioner, Indian Railways

EVEN AS disbelief was the response to the absence of any upward revision in fares and freight in the Rail Budget 2004-05, "there is no over-projection of earnings or under-projection of expenditure and whatever figures we have arrived at are highly realistic," according to Mrs. Vijayalakshmi Viswanathan, Financial Commissioner of the Indian Railways.

Talking to Business Line after the post-Budget briefing of the Railway Board in her Rail Bhawan office, Ms Viswanathan adduced reasons for refraining from any upward adjustment in freight saying, "we have to go in for marketing operation since there is enough scope to exploit the market and increase the earnings." As for passenger fares, "we want to arrest the evasion by ticketless travelling." In sundry earnings, there would be an attempt to arrest leakage of revenue in scrap disposal, with the Minister committed to computerising the information system for material management and freight operations.

Ms Viswanathan said that "the very fact that we have reduced our passenger earning from the Interim Budget shows that we have pegged it at the most realistic level. Our actual earnings during last year registered a growth of 5.26 per cent and we have fixed it up at more or less the same level."

Of revenue earning freight, she said: "When we fixed this at 570 million tonnes, it was with reference to 550 million tonnes for last year. Whereas as we ended up with 557 million tonnes ultimately, we thought this can be revised upwards and the trend to end-June 2004 shows that we have loaded 7 million tonnes more than last year which itself was a booming year. Thus as against 38 million tonnes incremental loading hauled last year, we have fixed it at 23 million tonnes with reference to the actual of last year and hence to the extent, there is no over- projection here."

On parcel earnings, Ms Viswanathan noted that they dropped last year because of the rationalisation effected, though volume-wise they went up. "We have tried to correct it by revising the parcel rates in the budget and we hope to mop up a very meagre Rs 50 crore."

In the past three years, she said the Railways' ordinary working expenses rose about 4 per cent, though last year it was 3 per cent. But this year this has been projected at 4 per cent as "we have to factor in post-Budget measures such as dearness allowance merger, diesel oil price increase, filling up of vacancies and allocations to disaster management expenditure."

Ms Viswanathan said there has been "a perceptible drop" in the energy bill due to various conservation measures and some concessions wrested from such States as Andhra Pradesh and Maharashtra on power. Moreover, last year, diesel prices did not show very violent fluctuations. The Railways also effected management of materials through modern technology and economy in expenditure of maintenance of the rolling stock particularly diesel and electric locomotives. Though this entailed some extra investment, they paid off.

On inventories, Ms Viswanathan said that "We have been able to bring down the cost mainly because more players are in the market and more sources are available and rates have come down as a result. Some of the units are contemplating a lean time cushion — buffer cushion and to that extent there is no inventory build-up."

There was also right-sizing of workforce, she said adding that despite the announcement of 20,000 vacancies, nothing got really filled up even as we will not like to sacrifice safety by not filling up" the posts. She said all the zonal railways have been instructed to do zero budgeting so that activity-wise requirement and need-based budgeting would be feasible.

Asked about whether classification of commodities and providing concessions on haulage of high-rated commodities introduced last year had caused dip in receipts but increase in volume, Ms. Viswanathan denied this stating that there might be a small drop in yield per million tonne from Rs 50 crore to Rs 49.68 crore but overall earnings went up.