Railways will cut investments by over 6 per cent to Rs 14,648 crore (Rs 146.48 billion) in 2005-06, indicating a slowdown in building new rail lines, track renewals and gauge conversion.

The Railway Budget for 2005-06, presented by Raliway Minister Lalu Prasad in Parliament on Saturday, has scaled down plan investments for the next fiscal from the revised estimate of Rs 15,608 crore (Rs 156.08 billion) in 2004-05.

The Railway Budget 2005-06: Complete Coverage

With the proposed cut in investment, the construction of new lines would be affected as Railways have budgeted only Rs 652 crore (Rs 6.52 billion) in 2005-06 for the purpose as against Rs 1,631 crore (Rs 16.31 billion) in this fiscal.

Track renewals would also be hit as the Budget has allocated only Rs 3,409 crore (Rs 34.09 billion) during 2005-06, much lower than the revised estimate of Rs 3,835 crore (Rs 38.35 billion) for 2004-05.

Social obligations to cost Rs 6,661 crore

The cost of subsidies for suburban passengers and carrying essential commodities will be Rs 6,661 crore (Rs 66.61 billion) on the Indian Railways during the current financial year.

According to the Budget papers, the social service obligation would lead to a loss of Rs 6,504 crore (Rs 65.04 billion) on account of expenditure on coaching services like suburban and non-suburban passenger tariff, parcel and luggage.

However, the estimated net social obligation of Railways stood at Rs 4,342.19 crore (Rs 43.42 billion) in 2004-05 after deduction of Rs 2,319.26 crore (Rs 23.19 billion) expenditure on staff welfare and law and order.

The loss on account of carrying essential commodities below the cost of operation stood at Rs 157 crore (Rs 1.57 billion) in 2004-05 with the movement of kerosene claiming the highest chunk at Rs 69.03 crore (Rs 690 million), followed by fruits and vegetables at Rs 46.29 crore (Rs 462.9 million).

Loss on account of the sugarcane movement, as part of the Railways social service obligation, stood at Rs 25.79 crore (Rs 257.9 million), while obligation due to movement of bamboos, coir products and livestock stood at Rs 8.56 crore (Rs 85.6 million), Rs 2.36 crore (Rs 23.6 million) and Rs 2.16 crore (Rs 21.6 million) respectively during 2004-05.

Railways are incurring an expenditure of Rs 705.03 crore (Rs 7.05 million) on Railway Protection Special Force, Order Police at Rs 220.72 crore (Rs 2.21 million), and health, medical and welfare activities {Rs 725 crore (Rs 7.25 billion)}.