The Parliament reconvened today after recess for the second part of the Budget Session. Amid disruptions, the Medical Termination of Pregnancy (Amendment) Bill, 2020 and the Mineral Laws (Amendment) Bill, 2020 were introduced in Lok Sabha. Discussions also began on the Direct Tax Vivad se Vishwas Bill, 2020 and the Central Sanskrit Universities Bill, 2019 (in Rajya Sabha).
During the second half of the Budget Session, Lok Sabha will discuss and vote on Demand for Grants for six Ministries: Railways , Social Justice and Empowerment, Tourism, Health and Family Welfare , External Affairs, and Housing and Urban Affairs .
The Demand for Grants for the Ministry of Railways is set to be discussed and voted this week.
Some highlights from our analysis of the Ministry’s Demand for Grants are:
- The Railways is steadily losing traffic to other modes of transport and as a result, the growth rate of both freight traffic and passengers has declined. The freight basket is also limited to a few bulk commodities such as coal, cement and iron ore. Any shift in transport patterns of any of these bulk commodities could affect the Railways’ finances significantly.
- In addition, profits from freight operations are used to offset losses from passenger services. In 2017-18, 95% of the profit earned from freight operations was utilised to compensate for losses from passenger and other services.
- High operating ratio (>90%) reduces the Railways’ ability to generate surplus for capital investments. As a result, the Indian Railways will fund only about 5% of this capital expenditure from its own internal resources in 2020-21. 52% will be financed through extra budgetary resources and the rest from the Centre.
More here: Demand for Grants Railways - 2020-21