The Hindu Business Line : Rlys makes Rs 4,500-cr provision for 6th Pay Commission outgo

The Railway Minister, Mr Lalu Prasad, has made a provision of Rs 4,500 crore to meet the impact of the recommendations of the Sixth Pay Commission during the coming fiscal. Of this, Rs 4,000 crore would go towards covering the revised salary bill of serving employees and another Rs 500 crore for pensions.

But the total additional outgo of Rs 4,500 crore will not really blow a hole into the Railways’ finances, given that the cash surplus position of the organisation has staged a significant improvement in recent times.

Between 2004-05 and 2007-08, the cash surplus (total receipts minus operating expenses, inclusive of appropriations towards pension) has gone up from about Rs 9,000 crore to over Rs 25,000 crore.

Cash surplus

The cash surplus is expected to marginally reduce to about Rs 24,800 crore, mainly because of the Pay Commission-induced increase in ordinary working expenses and pension outgo. But the overall buoyancy on the revenue front – courtesy, a booming economy – has ensured that there would be sufficient investible surplus even after providing for the anticipated higher salary-cum-pension bill.

The Indian Railways has about 14 lakh existing employees and an equal number of pensioners.

It is said to be the only rail organisation in the world, which is able to generate an operating surplus even after providing for pension from its own finances and not depending on the exchequer.

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