{"id":130549,"date":"2021-09-01T17:45:22","date_gmt":"2021-09-01T12:15:22","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=130549"},"modified":"2021-09-03T08:58:10","modified_gmt":"2021-09-03T03:28:10","slug":"a-sign-of-rlys-poor-health","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/a-sign-of-rlys-poor-health\/","title":{"rendered":"A sign of Rlys\u2019 poor health"},"content":{"rendered":"\n<p><strong>Source<\/strong>: This post is based on the article <strong>&#8220;<span lang=\"EN-US\">A sign of Rlys\u2019 poor health<\/span>&#8220;<\/strong> published in Business Standard on 1st September.<\/p>\n<h5><strong>What is the news?<\/strong><\/h5>\n<p>Railways&#8217; accounts reveal it spent \u20b998 to \u20b9100 in 2019-20. In 2019-20, the capital expenditure of Indian Railways (IR) increased 60% over 2016-17. But an analysis by Business Standard shows that Indian Railways has come to depend more on borrowings and budgetary support.<\/p>\n<p>A 2015 Committee on Restructuring Railways had flagged that over-reliance on borrowings could worsen the financial situation of Railways.<\/p>\n<h5><strong>Key points<\/strong><\/h5>\n<ul>\n<li><strong>Outside borrowing<\/strong>&#8211; In 2016-17, while 11% of its capital expenditure (capex) was funded by internal sources, in 2019-20 the ratio dropped to less than 1%.<\/li>\n<li><strong>Less revenue realisation<\/strong>&#8211; \u00a0Freight earnings are down, and passenger services have suffered. A report by the Comptroller and Auditor General (CAG)<strong>,<\/strong> released in September 2020, showed that freight profits could barely catch up with passenger losses.<\/li>\n<li><strong>Failing to capitalise on its assets<\/strong>&#8211; Sundry earnings (non-fare revenue), which account for revenues from advertising and lease of space and land, have also fallen.<\/li>\n<li><strong>Increased expenditure on subsidies<\/strong>&#8211; In 2004-05, Railways spent \u20b95,738 crore towards its net social sector obligations <em>(revenue forgone due to transporting essential commodities, passenger concessions and fare subsidies)<\/em>. Last year it stood at \u20b945,542 crore, a nine time increase.<\/li>\n<li><strong>Operating ratio is on decline<\/strong>&#8211; \u00a0For the last two years, CAG has been highlighting that Railways is adjusting advance payments to manage its operating ratio.<\/li>\n<li><strong>Decline in appropriation towards Depreciation Reserve Fund (DRF)<\/strong>&#8211; The appropriation under DRF has reduced by over 90% in the past five years. Instead, the Railways has been carrying out track renewal and repairs using <strong>the Rashtriya Rail Sanraksha Kosh.<\/strong><\/li>\n<li><strong>Not paying dividend<\/strong>&#8211; Railways has also not been paying dividend on its borrowings from the government since 2015-16.<\/li>\n<\/ul>\n<p>Thus, the above findings suggest that the financial health of Railways is less than optimal and it is facing various issues in handling the freight and passenger traffic.<\/p>\n<p><strong>Terms to know<\/strong>:<\/p>\n<ul>\n<li><span style=\"color: #0000ff;\"><strong><a style=\"color: #0000ff;\" href=\"https:\/\/forumias.com\/blog\/rashtriya-rail-sanrakshan-kosh\/\">Rashtriya Rail Sanraksha Kosh<\/a><\/strong><\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Source: This post is based on the article &#8220;A sign of Rlys\u2019 poor health&#8220; published in Business Standard on 1st September. What is the news? Railways&#8217; accounts reveal it spent \u20b998 to \u20b9100 in 2019-20. In 2019-20, the capital expenditure of Indian Railways (IR) increased 60% over 2016-17. But an analysis by Business Standard shows&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/a-sign-of-rlys-poor-health\/\">Continue reading <span class=\"screen-reader-text\">A sign of Rlys\u2019 poor health<\/span><\/a><\/p>\n","protected":false},"author":10330,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,9],"tags":[299,953],"class_list":["post-130549","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-public","tag-infrastructure","tag-railways","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":1700803665,"cached_date":1704668877},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/130549","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10330"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=130549"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/130549\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=130549"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=130549"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=130549"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}