Why is PMO concerned over railways' performance?

Why is PMO concerned over railways' performance?

Data shows Railways spent around 20.8% of the total budgetary support in Q1, down from 27% last fiscal

The Prime Minister’s Office (PMO) has asked the railways ministry to hasten key projects and highlighted concern over spending from the budgetary support, referring to “less than satisfactory performance” in some areas in a letter written earlier this month, according to a media report.

The prime minister’s principal secretary, Nripendra Misra, has highlighted in a note written to the ministry that in the first quarter ended June, the railways spent only 20 per cent of the Rs 40,000-crore gross budgetary support (GBS) provided by the Centre for the financial year. He also wrote about the slow progress of station development and high-speed rail projects. A ministry spokesperson refused to confirm the note.

GBS refers to the government’s support to a central plan. The GBS received from the finance ministry accounts for a major chunk of the rail ministry’s Plan outlay. Indian Railways plans to spend Rs 1 lakh crore in the current financial year. About 40 per cent (Rs 40,000 crore) of this would be GBS.

A Business Standard analysis shows the transporter, in the first quarter of the current financial year, utilised 20.8 per cent (Rs 8,335 crore) of the total GBS (Rs 40,000 crore). In the corresponding period last year (April-June 2014), the ministry had utilised 27 per cent (Rs 8,334 crore) of the GBS of Rs 30,100 crore.

The data also show spending on track renewals dipped to Rs 1,237 crore in the first quarter, from Rs 1,661 crore in the corresponding period last year; spending on gauge conversion dipped from Rs 720 crore to Rs 690 crore; and expenditure on rolling stock declined from Rs 970 crore to Rs 308 crore.

However, money spent on construction of new lines rose from Rs 1,215 crore to Rs 1,557 crore; expenditure on doubling rose from Rs 780 crore to Rs 1,045 crore; and the lease payments for assets rose from Rs 2,752 crore to Rs 3,007 crore. The total Plan expenditure, that includes capital spending from the GBS and four railway funds  — Depreciation Reserve Fund, Development Fund, Capital Fund and Railway Safety Fund — increased 11.5 per cent to Rs 13,977 crore in the first quarter.

For the high-speed rail corridor to be set up between Mumbai and Ahmedabad, the ministry is currently working on a feasibility and survey report submitted by Japan International Cooperation Agency in July. Another feasibility report is currently being prepared by Chinese agencies for the planned Delhi-Chennai corridor.

The Union Cabinet chaired by Prime Minister Narendra Modi had in July approved a station redevelopment plan for 400 top category stations on the Swiss challenge model of public-private partnership projects.

PMO TO RAIL MINISTRY

• The PM’s principal secretary in a note to the railways ministry said in the first quarter ended June, the railways spent only 20% of the gross budgetary support provided by the Centre for the current financial year
• He also wrote about the slow progress of station development and the high-speed rail projects

Source :Business Standard