Railway Budget 2010-11

The Profit of the Indian railways has fallen short this year. In 2009-10 Budget Estimates Indian Railways projected a profit of2642.26 Crore Rupees. How? The following break up makes you understand , how the profit decreased in 2009-10. The Budget Estimates for the year 2009-10 were as follows:

• Gross Traffic Receipts (a) = Rs. 88419 Crore
  This Gross Traffic Receipts had to be utilized as follows:
• (B)Ordinary working expenses = Rs. 62900 Crore
• (C) Appropriation to Depreciation Reserve Fund = Rs. 5325 Crore
• (D) Appropriation to Pension Fund = 13440 Crore

(E)A total of B,C & D gives Total Working Expenses of Railways =Rs. 81665 Crore

• (F)This working expenses is deducted from Gross Traffic Receipts to come at a figure which is called Net Traffic Receipts = Rs. 6754 Crore
• (G)Net Miscellaneous Receipts (which mainly include safety charges on passenger fares, subsidies, and other earnings) – Net Miscellaneous Expenses etc. is added to this figure = Rs. 1376.48
• (H) Adding F & G gives a figure called Net revenue= Rs. 8121.48 Crore
• (I)Out of this net revenue railway had planned to pay the dividend liability =Rs. 5479 Crore
• When I deducted from H , gives Excess/shortfall or generally we call it profit / loss: =Rs. 2642.26 Crore
• Out of This money Rs. 2000 crore had to be added to development Fund & Rs. 642.26 Crore to Capital Fund.
• Please note that the Operating ratio in Budget estimates of 2009-10 was 92.5.

After understanding the above datas , please have a look on the following table which gives a difference in estimated (Budget Estimates 2009-10) and actual (Revised Estimates 2009-10) Expenditures and earnings of Indian Railway:

The above Table shows that in 2009-10 Indian railways earned Rs. 951 crore instead of its estimated earnings of Rs. 2642.26 Crores as estimated in the Budget 2009-10.
Now next question is How Railways would meet the shortfalls?

1. Railway Minister says that an additional borrowing of Rs. 350 Crore by Indian Railway Finance Corporation would be necessary.
2. With this Total market Borrowings of Indian railways would be from Rs. 9170 crore to Rs. 9520 Crores.

What does Indian Railway Plan for 2010-11?
The following are the Budget Estimates of 2010-11. Please note that as we discussed in the previous paragraph, how much Railway earned in 2009-10, the same will be calculated in next year.

So, Indian Railway estimates Gross Traffic Receipts for year 2010-11 worth Rs. 94765 Crore and estimated earnings are Rs. 3173 Crores, out of which Rs. 2800 Crores will be added to the Development Fund and Rs. 373 crore will be added to the Capital Fund.What is Annual Plan for 2010-11?

1. Indian railways have also proposed an annual plant worth Rs. 41426 Crores. This is Highest investment plan ever made. This is Rs. 1142 Crore more than the plan of last year.
2. The plan money will come from Gross Budgetary Support of Rs. 15875 Crore, Diesel Cess of Rs. 877 Crore, Internal Resources of Rs. 14523 Crore and EBR of Rs. 10151 Crore. (EBR is extra budgetary Resources which include 9120 crores)
3. In incorporates Rs. 4411 crore for New lines, Rs. 1302 Crore for Passenger amenities, Rs. 1001 crore for Metro projects.
4. The plan also inlcudes acquisition of 18000 wagons. 1021 kms of new lines to be completed, and 9 new line projects have been announced.

Performance of Railway PSUs:
As per the Budget paper, all the eleven PSUs under the administrative control of the Ministry of Railways have performed well in 2008-09 and achieved a combined turnover of Rs 13,641 crore, earning a net profit of Rs 1,328 crore and paid a dividend Rs 286 crore to the Railways.