Indian Railways – Ending of social subsidies

Indian Railways – Ending of social subsidies

Ending of social subsidies by Railways

GOVERNMENT OF INDIA
MINISTRY OF RAILWAYS
RAJYA SABHA

QUESTION NO 1243

ANSWERED ON 27.07.2018

Ending of social subsidies by Railways

1243 Shri Kapil Sibal

Will the Minister of RAILWAYS be pleased to state :-
(a) whether it is a fact that Railways are planning to end social subsidies worth Rs.30,000 crore and if so, the details thereof and the reasons therefor;

(b) whether Railways have appointed two financial institutes in order to conduct survey in this regard and if so, the details of these institutes, their survey reports and cost incurred thereon; and

(c) whether meetings have been held in this regard and if so, the details of each meeting held till date along with the minutes of the meeting?
ANSWER

MINISTER OF STATE IN THE MINISTRY OF RAILWAYS (SHRI RAJEN GOHAIN)

(a) to (c): A Statement is laid on the Table of the House.

STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (c) OF UNSTARRED QUESTION NO.1243 BY SHRI KAPIL SIBAL ANSWERED IN RAJYA SABHA ON 27.07.2018 REGARDING ENDING OF SOCIAL SUBSIDIES BY RAILWAYS

(a) There is no subsidy on passenger and freight segment. However, Indian Railways (IR) carries out certain transport activities which are uneconomic in nature and are carried out in the larger interest of the country. The tariff policy on Indian Railways has traditionally been one of restraint with regard to increase in passenger fare. Indian Railways continues to incur losses every year by performing a variety of un-remunerative services. These losses are mostly due to (i) Low ordinary second class fare, (ii) Low Suburban and non-suburban season ticket, (iii) Loss on essential commodities carried below cost, and (iv) a variety of concessions granted on passenger ticket. Working of uneconomic branch lines, too, imposes a heavy burden on Indian Railways’ finances. A gap is thus created between the revenue income generated through these services and their cost.

(b) Indian Railways had appointed National Institute of Public Finance and Policy (NIPFP). MOU was signed on 13.07.2017 for study of “Developing a mechanism for computing the value of Social Service Obligation (SSO) being borne by Indian Railways”. Rs.29,50,000/- (including GST) have been paid to NIPFP for this study.

(c) NIPFP had submitted a Report on Social Service Obligations of IR dated 28.11.2017. The report is under consideration.