The Indian Railways in facing a financial crisis.

Quite unlike the previous

Indian Railways Minister Lalu Prasad yadav, who announced a surplus of Rs
25,000 crore (2008), this year things are going to be quite different.
Total revenues from passenger and freight this year for Indian Railways has
been around Rs 92,000 crore. Forbes says that it could fall short by Rs 4000
crore.
The Indian Railways is struggling with the financial burden of the sixth pay
commission amounting to Rs 55,000 crore along with  ther financial woes.
The reasons for the massive depletion of finances of Indian Railways have
been many, but major of them are as follows.
Causes of financial crunch
▪ Slow growth of freight business.
▪ Decrease in passenger traffic
▪ Increase in fuel prices (It has inflated its expenses by approximately Rs
1000 crore.
▪ Reduced investment by private freight carriers (They have hold up Rs 2000
crore since Railways is not allowing to carry them more freight. They
were given licenses during Lalu Prasad Yadav’s tenure as the Railway
Minister)
▪ Forbes says that this explains why the incremental freight loading target for
2010-11 is only 52 million tonnes compared to 60.3 million tonnes in
2009-10.Several other public-private projects including modernisation
of railway stations have not taken off due to a paucity of funds.
In 2007-08, the Indian Railways had a self generated fund balance of
approximately Rs. 19,700 crore. This was wiped out due to the costs on
salary and dividends to the government in the year 2009-2010.