Business Standard

Running on borrowings, Indian Railways must get on the track

India's largest public transporter has to reform its accounting practices to determine the losses it can sustain

Indian Railway

Indian Railways’ subsidy burden has increased and it hasn’t been able to capitalise from sundry earnings, like revenue from leasing and advertisements.

Ishaan Gera New Delhi
In 1959, John Meyer founded transport economics to study resource allocation in the sector. The field also studies the relevance of public transport and whether the sector should be run for profits.
Many development economists support subsidising public transport, arguing that the benefits of infrastructure and urban development outweigh the losses. The debate is about the bill for such losses. As its finances deteriorate, the Indian Railways faces a similar debate.
In 2015-16, Railways funded 18 per cent of its capital expenditure through internal resources. In 2021-22, internal resources will account for just 1.05 per cent of Rail­ways’ capital spending.

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First Published: Mar 30 2022 | 6:10 AM IST

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