Union Railway Minister Lalu Prasad Yadav had lots of self-congratulatory statements to make in his interim Budget for 2009-10, and naturally so, with just two months to go for general elections. Although he blamed the global recession for the sluggish performance this fiscal, he chose not to do his bit to boost growth and help mitigate the impact of the slowdown in his Rs 84,430 crore total expenditure plan for the next fiscal.

Though an interim Budget, Yadav stuck to his tried and tested formula of keeping all happy by cutting fares for all — masses and classes. But this time around, his largesse of a 2 per cent across-the-board fare cut will result in a Rs 700 crore lower passenger earnings. In 2008-09, he had announced fare cuts but those were dynamic and flexible, resulting in revenue foregone of just Rs 250 crore.

The meltdown pulled down his five-year cash surplus target of Rs 100,000 crore by Rs 10,000 crore. In fact, in the current fiscal, it is expected to be Rs 5,686 crore lower at Rs 19,320 crore compared with the Rs 25,006-crore surplus in 2007-08. Almost a third of his cash surplus of Rs 90,000 crore of last five years will go towards salaries and pension — Rs 28,000 crore over this fiscal (Rs 13,500 crore) and 2009-10 following the Sixth Pay Commission award.

The Railways’ operating ratio too has slumped to 88.3 compared with last fiscal’s 75.9. An operating ratio of 88.3 means the Railways spend Rs 88.3 to earn every Rs 100. But this is no mean achievement compared with the operating ratio levels of 99 and more that Railways suffered after Pay Commission awards in the earlier years.

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