With the Ministry of Railways back with the Congress after 16 years, a fresh wave of change is sweeping through the ministry.
For the first time, the railways has prioritised its 360 pending projects worth about Rs 4 lakh crore and tied up funds with them at zonal levels.
The ministry is also cautious about spending this time, as for the first time in a decade or so, it did not go for any supplementary demand for grants in the monsoon and winter sessions of Parliament.
“The railway is right now focusing on the existing projects. We have tied up funds for works at zonal levels and the power to reappropriate funds from one work to another vest with the board now in contrast to the zones earlier,” a senior railway ministry official told Business Standard.
“We also did not go for any supplementary demand for grants during the parliamentary session as the intention was to focus our resources on the budgeted works rather than starting new works.”
The railways, which went for a freight hike of 20-25 per cent in March 2012, is expecting a surplus of around Rs 12,000 crore.
The targeted annual Plan outlay of around Rs 60,100 crore in 2012-13 is expected to be financed by gross budgetary support of Rs 24,000 crore, internal resources of Rs 18,050 crore, extra budgetary resources of Rs 16,050 crore and railways safety fund of Rs 2,000 crore.
The funds raised by Indian Railways Finance Corp (IRFC) are totally dedicated to buy rolling stock.
In 2011-12, the railways invested these funds for project financing. But now, it is investing money on assets that have sure shot returns. The rolling stock being the only asset which starts generating money from the first day is the safest bet in contrast to long gestation period projects.
Among the key works under plan are: New lines, gauge conversion, track renewals, signaling and telecommunication and rolling stock. All the planned expenditure is dedicated on this. Among the key budgeted non-planned expenditure in 2012-13 are: 37 per cent on staff salaries, 16 per cent on pension funds and 17 per cent on fuel charges.
The contract has been put on hold and further payments have been stopped
Jaitley, however, cautioned things may go from bad to worse if the country gave a fractured mandate in the ensuing general elections