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Railways to slash operational cost; curb working expenses

Reeling under the impact of gross budgetary support cut and falling revenue collection, Railways is firming up plans to slash operational cost and working expenses considerably to meet its financial requirement.


Expecting very little help from the exchequer to meet the additional expenditure due to implementation of Seventh Pay Commission recommendations, railways is in the process of undertaking a series of measures to raise the resources on its own as told by the Finance Ministry.

Railway Minister Suresh Prabhu, gearing up to present his second Rail Budget on February 25, will unveil a plan to cut expenses and at the same time increase non-tariff revenue substantially to wade through the difficult phase in the public behemoth.

The aim is to reduce working expense by about 15 per cent. “The total working expenses was Rs 1.62 lakh crore last year,” sources added.

Rationalisation of staff strength and optimisation of workforce besides trimming of allowances are some ofthe steps to be undertaken to reduce working expenses.

The budget will also have multiple initiatives for improving passengers’ facilities, a key area in rail function, to make it more people-friendly, according to sources.

As per the plan, the next fiscal is expected to witness sustained efforts to reduce the energy bill by 20 per cent which is touching Rs. 30,000 crore at present. While the electricity bill is about Rs. 12,000 crore, diesel cost is around Rs. 18,000 crore a year.

Prabhu is focusing on generation of a substantial revenue through non-tariff sources like such as advertising, parcel-leasing, export of railway equipment and commercial exploitation of railway land.

The redevelopment of 400 stations is a step towards commercial exploitation of rail premises in a big way. Railways will provide space at trains, stations, bridges and other available places for advertisement. An action plan on aggressive advertising is likely to unfold shortly, they said.

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