Why the Railways can't find enough funds for safety

Railways

The Ministry of Railways (MoR) has been facing a barrage of questions on its safety practices from members of Parliament as well as travellers after the horrific Balasore accident in June this year, which killed 295 people and injured hundreds of others. For every single such query, the MoR has a stock reply. It lists out the falling numbers of accidents till FY23 — without referring to the June 2023 Balasore accident  — and then goes on to showcase the brilliant track record of expenditure on safety under the Modi government.

This is done by comparing the total expenditure on different safety heads (rolling stock, signalling works, track maintenance and bridge rehabilitation) during 2014-2023 with that made during the 10 years of the UPA regime from 2004. So, expenditure under the ‘safety-related works’ for rolling stock, for example, is shown to have increased by two-and-a-half times to Rs 1.78 lakh crore (curiously, this figure also includes the Budget Estimates for 2023-24) from Rs 70,273 crore spent during the UPA decade. Expenditure on track renewal has increased by 2.2 times under the current dispensation to Rs 91,809 crore from Rs 47,018 crore in the 2004-2014 period. And so on.

But the gross budgetary support during the nine years between 2014 and 2023 has jumped too, by well over five times compared to the allocation during the UPA era. Railway minister Ashwini Vaishnaw acknowledged as much while replying to a question by KC Venugopal of the Congress in a written reply in Rajya Sabha on August 4. In the 2004-2014 decade, the government allocated Rs 1.57 lakh crore to the Indian Railways (IR), which jumped to Rs 8.26 lakh crore during 2014-2024. Have investments under various safety heads kept pace with the massive increase in budgetary support?

Allocations to safety fund

It is in this context that the recent comments of the Parliamentary Standing Committee should be seen. The committee pointed out that Vishnaw’s ministry should start contributing its full share to the Rashtriya Rail Sanraksha Kosh (RRSK), a key safety fund, instead of depending on budgetary allocations to prevent train collisions, derailments, etc. If the MoR claims to be safety conscious and works towards ‘zero accident’ goal, it is a no-brainer that it must generate enough internal resources to contribute its share to RRSK instead of depending on government largesse, year after year.

Noting that normal train operations have been restored (after a long Covid19-led disruption) and trends in freight and revenue receipts were encouraging, the panel in its report tabled in Lok Sabha this week said that “efforts be now made to start contributing funds to RRSK so that the objectives of the extended currency of RRSK for the next five years are achieved and ‘Safety First and Safety Always’ motto could be accomplished,”. The appropriations for the RRSK have been falling short year after year, as the MoR has been unable to provide its share of funding.

RRSK was created in 2017-18 for five years “to ring fence funds for execution of works for renewal/replacement with safety-related implications with an annual contribution of Rs 20,000 crore. Of this, Rs 15,000 crore was to come from gross budgetary support and the balance Rs 5,000 crore from IR’s internal resources. The primary aim of RRSK was to invest in critical safety-related works to ensure a reduction of train collisions, derailments and unmanned level crossing accidents which together account for 9 in 10 rail accidents. The tenure of the fund was extended beyond the initial five years to another five, with the budgetary support of Rs 45,000 crore, on the recommendations of the Niti Aayog.

RRSK expenditure falls short

But since generation of internal resources has been a sore point within the IR for many years, the RRSK has never been provided the mandated Rs 20,000 crore annually. Therefore, it is not surprising that the RRSK expenditure fell short of Rs 1 lakh crore target. Data provided by the MoR to the standing committee show that the expenditure incurred under RRSK till March 2022 was Rs 74,444.18 crore. Also, the MoR’s contribution in this was only Rs 444.48 crore! The MoR’s allocation to RRSK has improved to Rs 1,000 crore in 2022-23 (revised estimates) and 2023-24 (budget estimates). Still, the proportion of IR’s contribution to this fund was not even a tenth of the total Rs 11,000 crore expenditure in these two years. So, all in all, the MoR has been paying lip service to spending heavily on safety, as the spending has been financed by budgetary support.

In its defence for failing to contribute its share, the MoR blamed the earnings shortfall due to its social service obligation and the adverse impact of Covid19. The social service obligation refers to the MoR’s passenger fare pricing which remains below cost; additionally, the ministry continues to offer discounts to several categories of passengers including the disabled and students. This social service obligation stood at Rs 51,138 crore in FY22. "Railways has not been able to revise its fare and freight, absorbing all costs on a real-time basis, with a view to keep logistics cost low and help the marginal sections of society," the MoR told the panel. Clearly, the inability to recover costs and the political implications of raising fares are impacting the MoR’s ability to generate resources for safety works. The Indian Railways revenues rose to a record Rs 2.4 lakh crore in FY23, up 25 percent year-on-year, official data shows. Freight revenue grew 15 percent to Rs 1.62 lakh crore while revenues from passenger services jumped 61 percent to Rs 63,300 crore.

The parliamentary panel wants the MoR to hasten the deployment of Kavach, the indigenously developed automatic train protection system which helps the loco pilot to operate a train at a specified speed, and deploy brakes if the loco pilot is unable to manage the speed. Kavach was adopted in July 2020 but to date, it has been deployed in a minuscule section of the Indian Railways network. The panel has also directed the MoR to use RRSK funds for Kavach deployment throughout the network at the earliest.

Sindhu Bhattacharya is a journalist based in Delhi who writes on a range of topics in business and economy. Views are personal, and do not represent the stand of this publication.