Rlys budgeting for 66% drop in fund balance to Rs 3,204 cr in FY17

Indian Railways is budgeting for a 66 per cent drop in its overall fund balance to Rs 3,204 crore for the next financial year (FY17) compared with Rs 9,340 crore in 2015-16, the rail ministry has said in response to a Business Standard news report titled "Railway funds set to turn negative in FY17," published on March 9.

The fund balance in FY15 was Rs 6,872 crore.

The report, based on the Union Budget 2016-17 document, had highlighted that the net balance in the six reserve funds would drop from Rs 2,467 crore at the end of the current financial year to a negative balance of Rs 6,095 crore in 2016-17, after accounting for budgeted appropriations and withdrawal from each of the funds.

"Traditionally, this statement depicts only the current credits and debits or the current transactions of individual fiscals. To get a complete picture of the available fund balances, the opening balance of respective funds has to be incorporated which indicates the net position of each of the funds is positive," the ministry said.

The balance of the six funds - Depreciation Reserve Fund, Development Fund, Pension Fund, Capital Fund, Debt Reserve Fund and Safety Fund - are a measure of the Railways' flexibility to meet expenditure and asset expansion. The Union Budget document shows the net balance in the six funds in 2016-17 will be a negative value of Rs 6,095 crore. However, according to the ministry, the funds will already have an "opening balance" of Rs 9,340 crore, leading to a "closing balance" of Rs 3,204 crore in 2016-17.