If you are a banker, the railways could be your next big-bang customer. With a surplus of Rs 25,000 crore and a vastly-improved balance sheet, railway minister Lalu Prasad can thump Chak De and raise tonnes of debt without any credit rating. Deferred dividend liability of nearly Rs 2,823 crore – arrears pertaining to 2001-02 when the railways was going through a tough time – are being paid up this year and there is no need to make any provision from 2008-09 onwards. That relieves the railways of Rs 660-crore burden per annum, providing more leeway for investments in infrastructure, safety and passenger amenities. The investible surplus estimated for 08-09 is pegged at Rs 19,992 crore, leaving the railways as an underleveraged entity. The estimate is no exaggeration as revised estimates indicate the investible surplus for the current year at Rs 20,049 crore. The slew of commitments made by the railway minister for investments in infrastructure over the medium term is founded on this bulging abundance. The UPA government can take credit for the railway turnaround story at next year’s general elections without hesitation though it may not cut much ice, unlike the job bonanza announced for porters and the promotions expected by those working as gangmen. Without hiking fares or freight, Lalu Prasad has managed a cumulative cash surplus (before dividend) of Rs 68,778 crore over a period of four years. Thanks to the booming economy, revenue from freight as well as passenger traffic has increased steadily, enabling the railway minister to go for cut in fares as well as freight. With operating revenue improving to 76% and return on capital hitting an all time high of 21 %, the railway minister can go all out with populist measures, if we wishes so, before the 2009 elections. The situation is so good that a provision of Rs 500 crore has been made in the pension fund to implement recommendations of the Sixth Pay Commission even though it is not sure if this will add to the burden of the railways in08-09. Notwithstanding the blips affecting economic growth target of 9% during the current year, freight as well as passenger earning targets have been met during the first three quarters. The freight loading target for 07 -08 has been increased to 790 million tonnes, resulting in an increase in earnings of Rs 800 crore. Pan of the boom could be [...]
Archive for March 2nd, 2008
Posted in 
CHEQUE DE RAILWAYS!
March 2nd, 2008 
krishna The railways would be the next big-bang customer for the bankers. As the balance sheet improved with a surplus of Rs 25,000 crores railway minister Lalu Prasad can thump Chak De and raise tonnes of debt without any credit rating. Deferred dividend liability of nearly Rs 2,823 crore – arrears pertaining to 2001-02 when the railways was going through a tough time – are being paid up this year and there is no need to make any provision from 2008-09 onwards. That relieves the railways of Rs 660-crore burden per annum, providing more leeway for investments in infrastructure, safety and passenger amenities. It is estimated that for 08-09, the investible surplus is estimated to be around Rs 19992 crore, leaving the railways as an under leveraged entity. The estimate is no exaggeration as revised estimates indicate the investible surplus for the current year at Rs 20,049 crore. The slew of commitments made by the railway minister for investments in infrastructure over the medium term is founded on this bulging abundance. In the general elections due next year, the UPA government can take credit for the railway turnaround story without hesitation though it may not cut much ice, unlike the job bonanza announced for porters and the promotions expected by those working as gangmen. With no fare or freight hike, Lalu Prasad has managed a cumulative cash surplus (before dividend) of Rs 68,778 crore over a period of four years. Thanks to the booming economy, revenue from freight as well as passenger traffic has increased steadily, enabling the railway minister to go for cut in fares as well as freight. With operating revenue improving to 76% and return on capital hitting an all time high of 21 %, the railway minister can go all out with populist measures, if we wishes so, before the 2009 elections. The situation is so good that a provision of Rs 500 crore has been made in the pension fund to implement recommendations of the Sixth Pay Commission even though it is not sure if this will add to the burden of the railways in08-09. Without hiking fares or freight, Lalu Prasad has managed a cumulative cash surplus (before dividend) of Rs 68,778 crore over a period of four years. Thanks to the booming economy, revenue from freight as well as passenger traffic has increased steadily, enabling the railway minister to go for cut in fares [...]
BE PROACTIVE ON THE PUBLIC POLICY FRONT
March 2nd, 2008 krishna Public policy always gets short shrift in our national discourse. It’s an incongruity in public life that becomes more evident by the day. In this large, diverse and problematic nation, public policy, as a discipline, continues to get short shrift in our national discourse. Later this week a $150-billion central budget for what is a rapidly-growing, $1-trillion economy, that is billed to be one of the biggest anywhere – in no time really, seen in the time span of nations – is to be presented by the finance minister. Yet public policy gets lackadaisical emphasis across the board, in academe, in the professions and amongst policy makers. And quite despite the notion that outlays do not necessarily mean outcomes. Wire money online to India with Xoom.com for as low as $4.99. The lacuna is all the more apparent when one considers the fact that empirical, evidence-based public policies are of paramount import as India picks up economic speed. It is true that of late, one or two prominent management institutes do conduct programmes on public policy, duly funded by the Centre. Also, a select few can now enroll at the Ivy-League Kennedy School. But such course offerings are almost invariably meant for mid-career bureaucrats, prior to postings and promotions. So, in the realm of public policy, the new programmes, apart from being few and far between, do imply no more than one step forward and two steps back. For, it suggests no real shift in the top-down public administration paradigm, to one with a proper accent on public policies. But then, the seeming downplaying of public policy design, analysis and follow through has much to do with decades of vainglorious punditry in the public domain, read misplaced socialism. Back then, with the wise grey-heads in Yojana Bhavan and the ministries elaborately planning and deciding on things, public policy as an intellectual endeavour scarcely made sense. Sure, the tallest in the land – unabashedly Anglophile to boot – did see to it that hand-picked, elite bureaucrats spent time at Oxbridge “to brush shoulders with different points of view.” However, bureaucrats have long ceased to be the main drivers of societal change. So the stress on public-policy as mid-career training for babudom is doubly anachronistic. A complete overhaul is much warranted. The point is that public policy programmes do need a far wider audience and remit, to include executives, analysts and [...]
MORE MONEY FOR UPA PET PROJECTS
March 2nd, 2008 krishna Despite poor financial performance of several flagship schemes, the UPA has gone ahead with higher allocation for them in the next fiscal. The government plans to allocate Rs 1, 16,170 crore, almost half of the gross budgetary support of Rs 2, 44,000 crore, to these 21 flagship programmes against the Rs 74,349 crore allocated in the current financial year. This shows the UPA’s focus is on the social sector before the general elections in 2009, a government official said. The 2008-09 budget will be the last budget of the UPA government before the next general elections. In place of the 2009-10 budget, the government will present a vote on account. Wire money online to India with Xoom.com for as low as $4.99. With its hands tied for the next budget, the government plans to increase allocation for crucial flagship programmes during the monsoon session of Parliament, for which a special provision was being made, officials said. However, till January 21, government ministries were able to spend only Rs 46,139 crore of the funds allocated for these schemes. This may well result in a money-spending spree as all funds have to be utilised before March 31, end of the current financial year. The Planning Commission’s performance report indicates the worst performing scheme is the Backward Regions Grant Fund administered by the Panchayati Raj Ministry. Of the allocated Rs 5,000 crores, the ministry was able to utilise Rs 1,074 crore till January. The National Horticulture Mission could spend only Rs 581 crore of the Rs 1,000 crore it was allocated. The rural water supply scheme and rural sanitation programme had less than 50 per cent fund utilization rate. FUND FLOW(figures in Rs. Crore)
