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In economics, a monopoly (from the Latin word monopolium ± Greek language monos, one + polein, to
sell) is defined as a persistent market situation where there is only one provider of a product or service.
Monopolies are characterized by a lack of economic competition for the good or service that they
provide and a lack of viable substitute goods.
Monopoly should be distinguished from monopsony, in which there is only one buyer of the product or
service; it should also, strictly, be distinguished from the (similar) phenomenon of a cartel. In a
monopoly a single firm is the sole provider of a product or service; in a cartel a centralized institution is
set up to partially coordinate the actions of several independent providers (which is a form of oligopoly).
A pure monopoly is an industry in which a single firm is the sole producer of a good or the sole provider
of a service. This is usually caused by barriers to entry.
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The product or service is unique in ways which go beyond brand identity, and cannot be easily replaced
(a monopoly on water from a certain spring, sold under a certain brand name, is not a true monopoly;
neither is Coca-Cola, even though it is differentiated from its competition in flavor).
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In a pure monopoly a single firm controls the total supply of the whole industry and is able to exert a
significant degree of control over the price, by changing the quantity supplied (an example of this would
be the situation of Viagra before competing drugs emerged). In subtotal monopolies (for example
diamonds or petroleum at present) a single organization controls enough of the supply that even if it
limits the quantity, or raises prices, the other suppliers will be unable to make up the difference and take
significant amounts of market share.
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The reason a pure monopolist has no competitors is that certain barriers keep would-be competitors
from entering the market. Depending upon the form of the monopoly these barriers can be economic,
technological, legal (e.g. copyrights, patents), violent (competing businesses are shut down by force), or
of some other type of barrier that completely prevents other firms from entering the market.
¦
In economics a company is said to have monopoly power if it faces a downward sloping demand curve
(see supply and demand). This is in contrast to a price taker that faces a horizontal demand curve. A
price taker cannot choose the price that they sell at, since if they set it above the equilibrium price, they
will sell none, and if they set it below the equilibrium price, they will have an infinite number of buyers
(and be making less money than they could if they sold at the equilibrium price). In contrast, a business
with monopoly power can choose the price they want to sell at. If they set it higher, they sell less. If they
set it lower, they sell more.
In most real markets with claims, falling demand associated with a price increase is due partly to losing
customers to other sellers and partly to customers who are no longer willing or able to buy the product.
In a pure monopoly market, only the latter effect is at work, and so, particularly for inflexible
commodities such as medical care, the drop in units sold as prices rise may be much less dramatic than
one might expect.
If a monopoly can only set one price it will set it where marginal cost (MC) equals marginal revenue
(MR) as seen on the diagram on the right. This can be seen on a big supply and demand diagram for
many criticism of monopoly. This will be at the quantity Qm; and at the price Pm. This is above the
competitive price of Pc and with a smaller quantity than the competitive quantity of Qc. The offensive
monopoly gains is the shaded in area labeled profit (note that this diagram looks only at the case where
there is no fixed cost. If there were a fixed cost, the average cost curve should be used instead).
As long as the price elasticity of demand (in absolute value) for most customers is less than one, it is very
advantageous to increase the price: the seller gets more money for less goods. With an increase of the
price, the price elasticity tends to rise, and in the optimum mentioned above it will be above one for
most customers. A formula gives the relation between price, marginal cost of production and demand
elasticity which maximizes a monopoly profit: (known as Lerner index). The monopolist¶s monopoly
power is given by the vertical distance between the point where the marginal cost curve (MC) intersects
with the marginal revenue curve (MR) and the demand curve. The longer the vertical distance, (the
more inelastic the demand curve) the bigger the monopoly power, and thus larger profits.
The economy as a whole loses out when monopoly power is used in this way, since the extra profit
earned by the firm will be smaller than the loss in consumer surplus. This difference is known as a
deadweight loss.
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Indian Railways (IR) is the state-owned railway company of India. Indian Railways had, until very
recently, a monopoly on the country¶s rail transport. It is one of the largest and busiest rail networks in
the world, transporting just over six billion passengers and almost 750 million tonnes of freight
annually. IR is the world¶s largest commercial or utility employer, with more than 1.6 million employees.
The railways traverse through the length and width of the country; the routes cover a total length of
63,940 km (39,230 miles). As of 2005 IR owns a total of 216,717 wagons, 39,936 coaches and 7,339
locomotives and runs a total of 14,244 trains daily, including about 8,002 passenger trains.
Railways were first introduced to India in 1853. By 1947, the year of India¶s independence, there were
forty-two rail systems. In 1951 the systems were nationalised as one unit, becoming one of the largest
networks in the world. Indian Railways operates both long distance and suburban rail systems.
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The development of IR had its roots in the 1800s, when India was a British colony. The British East
India Company and later, the British colonial governments were credited with starting a railway system
in India.
The British found it difficult to traverse great distances between different places in India. They felt the
need to connect those places with trains to speed up the journey as well as to make it more comfortable
than travel by road in the great heat. They also sought a more efficient means to transfer raw materials
like cotton and wheat from the hinterlands of the country to the ports located in Bombay, Madras and
Calcutta, from where they would be transported to factories in England. Besides, the mid-1800s were a
period of mutiny and struggle for independence in India, with uprisings in several parts of the country.
The British leaders wanted to be able to transfer soldiers quickly to places of unrest. Railways seemed to
be the ideal solution to all these problems.
Work began on the development of railway systems in India in the early 1850s. Initially, trains were
used to transport material between different places. The first commercial passenger train in India ran
between Bombay and Thane (places in western India) on April 16, 1853.
The distance of 34 kilometers was covered in about 75 minutes. Indians were initially apprehensive of
accepting railways as a means of travel, but soon overcame that fear and railways gained popularity.
Soon, railway lines began to be laid in other parts of the country, mostly by private British companies,
and the major regions in India were connected by rail. To promote the construction of railway lines in
India, the British Parliament introduced the guarantee system.
Under this system, any company that constructed railway lines in India was given a guarantee of a five
percent return per annum on the capital invested. The company also had the right to pull out from the
venture and receive compensation from the government at any time if it was not satisfied with the
returns. This helped accelerate the development of railways in the country.
A number of railway companies were incorporated between 1855 and 1870. Most of them operated at a
regional level. By the beginning of the 1870s, the total track coverage in India was 4000 miles. In
addition to commercial objectives, railways also began to play a social role in India. When there were
famines in several parts of the country between 1870 and 1880, railways played a very important role in
providing relief to the affected areas.
By the end of 1880, the total track coverage increased to 9000 miles. In 1880, the Darjeeling Steam
Tramway started operating (the name was changed to Darjeeling Himalayan Railway in 1881). This
railway track was considered one of the greatest engineering feats in the history of IR, crossing as it did,
rough and dangerous mountain terrain at a steep gradient.
In 1890, the British Government passed the Railways Act, to govern the construction and operation of
railways in India. By the beginning of the 20th century, there were nearly 25,000 miles of railway track
in the country.
The Map of India above shows the different railway zones in India. The zones are numbered in the map.
The red dots are the zonal headquarters. For administrative purposes, Indian Railways is divided into
sixteen zones.
Given below is the table showing these 16 zones.
is constituted as a
separately incorporated railway, with its headquarters at Belapur CBD (Navi Mumbai). It comes under
the control of the Railway Ministry and the Railway Board.
The Calcutta Metro is owned and operated by Indian Railways, but is not a part of any of the zones. It is
administratively considered to have the status of a zonal railway.
Date
Sr. No.Y NameY Abbr.Y HeadquartersY
EstablishedY
Y Northern Railway Y
Y
Y
Y
Y Y
Y North Eastern Y
Y Y
RailwayY
Northeast Frontier
Y Y Y
Railway
Y
+*'Y
Y
Y Western Railway ,Y *'
Y
Y
Y
South Western
-Y ",Y .'
Y
Y--Y
Railway
Y
North Western
Y ,Y /
(%Y
Y--Y
Railway
Y
Indian Railways operates 8,702 passenger trains and transports around five billion annually across
twenty-seven states and three union
territories (Delhi, Pondicherry and Chandigarh).Sikkim is the only state not connected.
The passenger division is the most preferred form of long distance transport in most of the country.
In South India and North-East India however, buses are the preferred mode of transport for
medium to long distance transport.
A standard passenger train consists of eighteen coaches, but some popular trains can have up to 24
coaches. Coaches are designed to accommodate anywhere from 18 to 72 passengers, but may actually
accommodate many more during the holiday seasons and on busy routes. The coaches in use
are vestibules, but some of these may be dummied on some trains for operational reasons. Freight
trains use a large variety of wagons.
Each coach has different accommodation class; the most popular being the sleeper class. Up to nine of
these type coaches are usually coupled. Air conditioned coaches are also attached, and a standard train
may have between three and five air-conditioned coaches.
Overcrowding is the most widely faced problem with Indian Railways. In the holiday seasons or on long
weekends, trains are usually packed more than their prescribed limit. Ticket-less travel, which results in
large losses for the IR, is also an additional problem faced.
¦
The interior of an Express Train in India. Food is being served by an Indian Railways employee.
The Indian Railways manufactures a lot of its rolling stock and heavy engineering components. This is
largely due to historical reasons. As with most developing economies, the main reason is import
substitution of expensive technology related products. This was relevant when the general state of the
national engineering industry was immature.
Production Units, the manufacturing plants of the Indian Railways, are managed directly by the
ministry. The General Managers of the PUs report to the Railway Board. The Production Units are,
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Responsible for manufacturing all the mainline diesel-electrics used for passenger and freight traffic.
The plant also produces diesel-electric shunters. Currently the factory is also producing locomotives in
collaboration with General Motors, USA.
ÔY
Chittaranjan manufactures Electric Locomotives. Traditionally, the locomotives made by CLW use DC
traction. In recent times, CLW has manufactures locomotives with AC-AC transmission.
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!
¦
Earlier called Diesel Component Works, DMW makes key sub-assemblies for Diesel Locomotives. It also
does heavy repair and overhaul of engines and locomotives.
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IR carries a huge variety of goods ranging from mineral ores, agricultural produce, petroleum, milk and
vehicles. Ports and major urban areas have their own dedicated freight lines and yards. Many important
freight stops have dedicated platforms and independent lines.
Indian Railways makes 70% of its revenues and most of its profits from the freight sector, and uses these
profits to cross-subsidise the loss-making passenger sector. However, competition from trucks which
offer cheaper rates has seen a decrease in freight traffic in recent years. Since the 1990s, Indian Railways
has switched from small consignments to larger container movement which has helped speed up its
operations. Most of its freight earnings come from such rakes carrying bulk goods such as coal, cement,
food grains and iron ore.
Indian Railways also transports vehicles over long distances. Trucks that carry goods to a particular
location are hauled back by trains saving the trucking company on unnecessary fuel expenses.
Refrigerated vans are also available in many areas. The ³Green Van´ is a special type used to transport
fresh food and vegetables. Recently Indian Railways introduced the special µContainer Rajdhani¶ or
CONRAJ, for high priority freight. The highest speed notched up for a freight train is 100 km/h
(62 mph) for a 4,700 metric tonne load.
Recent changes have sought to boost the earnings from freight. A privatization scheme was introduced
recently to improve the performance of freight trains. Companies are being allowed to run their own
container trains. The first length of an 11,000km freight corridor linking India¶s biggest cities has
recently been approved. The railways has increased load limits for the system¶s 220,000 freight wagons
by 11%, legalizing something that was already happening. Due to increase in manufacturing transport in
India that was augmented by the increase in fuel cost, transportation by rail became advantageous
financially. New measures such as speeding up the turnaround times have added some 24% to freight
revenues.
0
The Darjeeling Himalayan Railway is a World Heritage Site, and one of the few steam engines
in operation in India.
Indian Railways is a publicly owned company controlled by the Government of India, via the Ministry of
Railways. The ministry is currently headed by ¦
', the Union Minister for Railways
and assisted by two junior Ministers of State for Railways, R. Velu and Naranbhai J. Rathwa. Reporting
to them is the Railway Board, which has six members and a chairman.
Each of the sixteen zones is headed by a General Manager (GM) who reports directly to the Railway
Board. The zones are further divided into divisions under the control of Divisional Railway Managers
(DRM). The divisional officers of engineering, mechanical, electrical, signal & telecommunication,
accounts, personnel, operating, commercial and safety branches report to the respective Divisional
Manager and are in charge of operation and maintenance of assets. Further down the hierarchy tree are
the Station Masters who control individual stations and the train movement through the track territory
under their stations¶ administration. In addition to the zones, there are six production units (PUs) each
headed by a General Manager (GM), who also report directly to the Railway Board.
These production units are:
The Railway Budget deals with the induction and improvement of existing trains and routes, the
modernisation and most importantly the tariff for freight and passenger travel. The Parliament
discusses the policies and allocations proposed in the budget. The budget needs to be passed by a simple
majority in the Lok Sabha (India¶s Lower House). The comments of the Rajya Sabha (Upper House) are
non binding. Indian Railways are subject to the same audit control as other government revenue and
expenditures. Based on the anticipated traffic and the projected tariff, the level of resources required for
railway¶s capital and revenue expenditure is worked out. While the revenue expenditure is met entirely
by railways itself, the shortfall in the capital (plan) expenditure is met partly from borrowings (raised by
Indian Railway Finance Corporation) and the rest from Budgetory support from the Central
Government. Indian Railways pays dividend to the Central Government for the capital invested by the
Central Government.
As per the Separation Convention, 1924, the Railway Budget is presented to the Parliament by the Union
Railway Minister, two days prior to the General Budget, usually around 26 February. Though the
Railway Budget is separately presented to the Parliament, the figures relating to the receipt and
expenditure of the Railways are also shown in the General Budget, since they are a part and parcel of the
total receipts and expenditure of the Government of India. This document serves as a balance sheet of
operations of the Railways during the previous year and lists out plans for expansion for the current
year.
The formation of policy and overall control of the railways is vested in Railway Board comprising the
Chairman, Financial Commissioner and other functional Members for Traffic, Engineering, Mechanical,
Electrical and Staff matters. As per the 2006 budget, Indian Railways earned Rs. 54,600 crores (Rs.
546,000 million or US$12,300 million). Freight earnings increased by 10% from Rs. 30,450 cr
(US$7,000 million) in the previous year. Passenger earnings, other coaching earnings and sundry other
earnings increased by 7%, 19% and 56% respectively over previous year. Its year end fund balance is
expected to stand at Rs. 11,280 cr (US $2.54 billion).
Around 20% of the passenger revenue is earned from the upper class segments of the passenger
segment (the air-conditioned classes). The overall passenger traffic grew 7.5% in the previous year. In
the first two months of India¶s fiscal year 2005-06 (April and May), the Railways registered a 10%
growth in passenger traffic, and a 12% in passenger earnings.
A new concern faced by Indian Railways is competition from low cost airlines that has recently made its
début in India. In a cost cutting move, the Railways plans to minimise unwanted cessations, and scrap
unpopular routes.
Apart from execution of Railway projects in Mumbai, the main functions of MRVC are:
India wants to get rid of infrastructure bottlenecks so that the pace of economic growth can be
accelerated to as much as 10 percent in the next decade from an average 6 percent since 1980.
Construction of dedicated freight corridors will allow companies such as refiner Indian Oil Corp. to
move gasoline and diesel faster to consumers across the world¶s seventh-biggest landmass.
Indian Railways last month began constructing 220 billion rupees of freight-only lines aimed at
improving infrastructure in the world¶s second-fastest growing major economy.
Prime Minister Manmohan Singh opened the construction work in northern India¶s Punjab state,
according to an e-mailed statement from his office. The project, the railways¶ biggest since India¶s
independence in 1947, will lay almost 10,000 kilometers (6,215 miles) of tracks connecting the financial
hub of Mumbai on the west coast and Kolkata in the east to the capital New Delhi.
The freight corridor will eventually be 11,500 kilometers, Batra said.
The government in February said it granted licenses to 14 companies to run private trains, ending the
monopoly of the government in the business.
Indian Railways expects to carry 750 million tons of freight this year, more than the 726 million tons
that had been targeted, Batra said.
The utility expects to carry 6.5 billion people in the year ending March 31, 2007, compared with 6 billion
people in the previous year, the official said.
Indian Railways may have a surplus of 200 billion rupees ($4.4 billion) this year, from a surplus of 136
billion rupees last year, he said.
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The financial performance of the Indian Railways for the period from 1998-99 to 2002-03 is shown
below:
R YY
Y
The detailed break-up of the traffic receipts of Railways for the years 2002-03 along with the details of
BE, RE and actuals of previous year¶s receipts is shown below:
R YY
Y
The passenger earnings target was fixed at Rs.13450 crore in the BE. The target was, however, scaled
down by Rs.720 crore in the RE to Rs.12730 crore. The actual passenger earnings were Rs.12575.44
crore. Passenger earnings, thus fell short of both the BE and RE projections. The earnings, however,
registered a growth of about 12.32 per cent as compared to 2001-02.
&
ÔY Earnings from goods traffic were estimated to yield Rs.26118 crore in the BE and Rs.26658 crore in
the RE. The actual earnings of Rs.26504.82 crore were more than BE by Rs.386.82 crore but fell
short of the RE by Rs.153.18 crore.
ÔY The originating revenue earning goods traffic was projected at 510 million tonnes for 2002-03. This
was increased to 515 million tonnes in RE. Railways actually lifted 518.74 million tonnes of revenue
earning goods thereby exceeding the targets.
ÔY The target for volume of revenue earning goods traffic was projected at 334213 million net tonne
kilometres (NTKMs) which was increased to 357163 million NTKMs in RE. The actuals during 2002-
03 was 353194 million NTKMs, which was more than BE by 18981 million NTKMs but less than the
RE by 3969 million NTKMs.
The increase / decrease in originating tonnage of various commodities in 2002-03 over 2001-02 is
shown in the following chart:
ÔY The offering of µPOL¶ and µFertilizer¶ declined by 1.57 million tonnes and 0.74 million tonnes
respectively, as compared to the actuals of 2001-02.
ÔY The average lead for coal traffic, which was 614 kms in 2001-02, had decreased to 601 kms in 2002-
03. Thus, while the Railways have been able to bring in additional coal traffic, they have actually
suffered loss of long lead traffic at the cost of short lead traffic.
ÔY There was a shortfall in goods earnings from µOther Goods¶ (Rs.409.63 crore), µIron Ore for Export¶
(Rs.155.07 crore), µPOL¶ (Rs.148.81 crore), µCement¶ (Rs.147.77 crore), µFertilizers¶ (Rs.59.91 crore),
µMiscellaneous Goods¶ (Rs.26.63 crore) and µRaw Material for Steel Plants¶ (Rs.3.63 crore).
ÔY There was a shortfall in originating tonnage in respect of µOther Goods¶, µPOL¶, µFertilizers¶, µIron Ore
for Export¶ and µCement¶ by 4.75 million tonnes, 2.55 million tonnes, 2.04 million tonnes, 1.84
million tonnes and 0.25 million tonnes, respectively.
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The total amount outstanding against the State Electricity Boards/ Power Houses which stood at
Rs.1616.45 crore at the end of 2001-02, increased by Rs.137.42 crore (8.5 per cent) bringing the balance
to Rs.1753.87 crore at the end of 2002-03.
The outstanding dues against the main defaulting Power Houses/ State Electricity Boards was as under:
R YY
Y
The operating ratio of Indian Railways during the last five years is shown in the following chart:
Y Y Y Y Y
Y 0&Y
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Y 7*Y)# Y ----Y ---Y #)Y
Y
Y+1Y
'Y 417Y Y
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7*Y $Y &Y
- Y ---Y #--Y #- Y
Y &Y Y 6Y
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otal Central Oovernment
. Y
.Y .Y
.Y
SupportY
.Y nternal ResourcesY
Y Y Y Y
Y
%Y
## Y ---Y #--Y #)Y
Y 1+Y&Y
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*Y
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Y #---Y #---Y # Y
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otal nternal ResourcesY . Y .Y .Y .Y
Orand otal of Plan Funds
.Y .Y
.Y .Y
(
Y
> Expenditure borne out of the SRSF financed by levy of safety surcharge and from Railways allocation
to the fund from its own resources.
*
The Railways are required to pay dividend at a fixed rate on the Capital advanced by the Government of
India. The Railway Convention Committee (RCC) of Parliament determines the rate of dividend payable
by the Railways to the General Revenues periodically. In accordance with the recommendation of the
RCC:
ÔY A moratorium is given on the payment of interest (dividend) on investments made on new lines out
of borrowed capital during the period of construction and for five years after a line is opened to
traffic. The cumulative liability on this account is payable when the line shows surplus after meeting
the current dividend. The liability is written off, if not paid within 20 years of opening of a line, to
traffic.
ÔY Any shortfall in the payment of current dividend, when the net revenue is not adequate to meet
current dividend, is treated as deferred dividend liability.
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"
) Railway-wise analysis of the Pension Fund balances on 31 March 2003 has revealed
that the following Railways had adverse (debit) balances in the fund:
R YY
Y
On the other hand, Northeast Frontier, South Eastern, Western Railways, Metro Railway Kolkata and all
the Railway Production Units have appropriated more to the fund than the amount required for meeting
the pensionary charges of 2002-03.
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"
) For replacement and renewal of assets, the Railways maintain
Depreciation Reserve Fund (DRF) financed by transfers from Revenue.
The balances in DRF for the last five years is shown in the following table:
R YY
Y
Withdrawals
Accretion during
½earY Opening alanceY during Closing alanceY
the yearY
the yearY
9Y )Y )#Y -Y #)#)Y
9---Y #)#)Y )Y Y - Y
---9- Y - Y Y --Y ) -Y
-- 9-Y ) -Y Y ## Y # Y
--9-Y #-Y -Y #)Y )Y
Notes:
1. Difference between closing balance of 2000-01 & 2001-02 and opening balance of 2001-02 & 2002-
03 amounting to Rs.0.06 crore and Rs.0.02 crore respectively is due to transfers made between DRF
and Capital Fund.
2. Accretion includes interest on the balance in the fund.
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"
) This fund is financed by appropriation from surplus and/ or loans from General
Revenues to the extent required to meet expenditure on works relating to amenities for users of Railway
transport, labour welfare works, safety works and unremunerative operating improvement works.
Appropriation from surplus to Development Fund (DF) was projected at Rs.550 crore in the BE and RE.
Ministry actually appropriated Rs.550 crore as planned to this fund.
The balances in DF for the last five years is shown in the following table:
Difference between closing balance of 1998-99 and opening balance of 1999-2000 is due to rounding off
while difference between closing balance of 2000-01 and opening balance of 2001-02 is due to transfer
of Rs.226.84 crore to Railway Safety Fund and transfer of Rs.0.04 crore from Capital to DF. Difference
between closing balance of 2001-02 and opening balance of 2002-03 is due to transfer of Rs.0.06 crore
from Capital and DRF.
"
) This fund was created with effect from 1 April 1993 to finance the Capital works of the
Railways. The balance amount of surplus left after appropriation to Development Fund is credited to
this fund. Since the Railways have not been able to generate adequate surplus for appropriation to
Capital Fund, the operation of Capital Fund has ceased for the time being.
Appropriation from surplus to Capital Fund (CF) was projected at Rs.17.43 crore at the BE stage. In the
RE there was no proposal to appropriate any surplus into the fund. An amount of Rs.0.94 crore was
credited to the fund as interest at 7 per cent per annum on the fund balance during the year 2002-03.
The balances in CF for the last five years is shown in the following table:
"
)A new fund, namely Special Railway Safety Fund (SRSF) was set up in
2001-02, to wipe out the arrears of replacements/ renewals of vital safety equipment on Railways in
fixed time schedule of 5 to 7 years. This fund was to be financed partly through Railway Revenues by
levy of safety surcharge (Rs.5000 crore) and balance (Rs.12000 crore) through additional financial
assistance (dividend free Capital) from General Revenues. During the year 2002-03 this fund received
Rs.1350 crore by transfer from Capital and appropriation of Rs.1167.91 crore (inclusive of Rs.602.51
crore of safety surcharge receipts) from Revenue. The outgo on account of plan expenditure chargeable
to this fund amounted to Rs.2486.31 crore leaving a balance of Rs.52.42 crore in the fund on 31 March
2003.
The balance in SRSF is shown in the following table:
½EARY
Y Y Y Y Y Y
Y
Net Revenue ReceiptsY )#Y ) )Y )Y )Y
) Y
- Y
- Y
Y Y Y Y Y Y Y Y
-)Y
#Y
-Y
#Y
)#)Y
-) Y
)Y
-Y
)$
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There are few political leaders in the country who have been more sharply
criticised than Railways Minister Lalu Prasad Yadav. But now, there is a genuine sense of respect for
what Lalu has been able to achieve for Indian railways, which is looking healthier than it has in years.
In fact, Lalu and his Railways Ministry have been so impressive that they are now a case study for the
Indian Institute of Management (IIM).
When he wrestled the Railways Ministry from Ram Vilas Paswan, many had written the obituary of the
Indian railways, saying Lalu would drive it into the ground. But he¶s proved the skeptics wrong.
$*
The Indian railways, an organisation heading towards bankruptcy three years ago when he took over,
now has a surplus revenue of Rs. 11,000 crore, a feat that has won grudging respect for Lalu.
And with success has come recognition. IIM-A is taking the railways success as a case study.
Lalu achieved the feat by taking simple steps like competitive passenger fares
and reducing the wagons¶ turnaround time from seven to five days.
He also raised the carrying capacity of goods trains from 3,200 tonnes to 4,000 tonnes, which led to
higher freight earnings.
³This is just the start. We will soon have a surplus of Rs 20,000 crore. We will do more, you see our
profits will climb even further,´ added a confident Lalu.
Railways officials are in a celebratory mood, as they know their organisation has turned the corner and
the architect of this success is the railways minister.
Turning to the Aam Aadmi slogan, the minister said the railways will soon create economic
opportunities for the farmers. ³We plan to create a public-private partnership model, wherein retail
stores would be set up at around 7,500 stations across the country. It will facilitate procurement,
distribution and marketing. We plan to involve corporates in this project. Global tenders will be invited,´
he said.
He also talked about providing rail connectivity to all the ports in the country. ³We intend to ease the
congestion on the road. This would mainly facilitate the car exports from India,´ he said.
While the minister termed the bullet train project unviable for the country, he
told media persons that the ministry plans to take measures to tighten security in the system.
³We plan to introduce close circuit TVs and metal detectors at all the major stations. We also plan to
restrict entry at the platforms. Only passengers will be allowed to enter the platforms,´ he said.
The minister also stated that he had big plans to enable travellers to get a worldclass experience.
Starting with stations at major cities like Ahmedabad, Delhi, Chennai, Mumbai and Patna the new
station will have underground cross-over system to reach different platforms instead of an overbridge.
Taking a dig at his predecessor Nitish Kumar, Lalu Prasad said, ³I am aware what he has been saying
about our turnaround story and the situation in Bihar. Let us see if he is able to deliver. I don¶t think he
can.´
However, he steered clear of making any controversial statements. When asked about his views on
reservation, he said, ³Today is not the day to discuss it.´