Wednesday, September 16, 2009


1.1 Indian Railways have all along accepted certain social obligations not usually associated with a purely commercial undertaking. The railways operate not only on commercial consideration but also in terms of wider economic and social interests. The Railways, therefore, simultaneously perform the dual role of commercial undertaking and a public utility service. Being a public utility undertaking, Indian Railways do not have the freedom to strike a balance between the two conflicting objetives of earning substantial revenues and meeting social obligations.
The expense incurred in a public service obligations may be aptly termed as social costs. The social costs borne by the Railways, may be briefly classified as under:
i) Carriage of essential commodities at below cost.
ii) Passenger and other coaching service at below cost and loss in suburban services,
iii) Uneconomic Branch Lines.
iv) Freight concession on relief materials,
v) Other obligations such as education, security etc

1.2 Essential Commodities: A number of commodities which are required for essential consumption and have direct bearing on the cost of living of the weaker sections of the society have been traditionally carried at concessional rates. The commodities include foodgrains,salts, fresh vegetables and fruits, edible oil, sugar etc. The Railway incurrs losses every year on this account
1.3 Passenger and Other Coaching Services:
The overall loss in the passenger and coaching service is more than Rs.100 Crores every year. The suburban passenger services in and around Bombay, Calcutta and Chennai alone account for Rs.25 Crores. (Thls claim is questioned by many forums and debate is going on).
The concession in fares are extended to students, sportsman, artists, scouts, trained nurses, teachers and educational tours, blind persons, TB/cancer patients etc. Military traffic is also carried below cost.

1.4 Uneconomic Branch Line:
A number of branch lines are utilised below their capacity and the services on these lines are therefore, not commercially viable. However, there is a strong public resistance to any proposal forr slosure of these lines.
1..5 Fodder despatched to scanty area is charged at concessional rates at the request of State Governments. Again relief supplies such us medicines, clothing, blankets etc., are carried free of charge.

1..6 Other Social Costs:
The Railways provide a large number of non-wage benefits such as health and medical services, subsidised housing and educational assistance to the employees’ children. The Railways share a part of expendilurc incurred by the State Governments on deployed Police Force in the Railway premises.
1.7 As a result of constant and continuous review ofl these aspects by various committess, certain exemptions have been provided from the payment of dividend (e.g, .strategic lines, unremuerative branch lines etc.,). However, the losses incurred in running suburban services and other obligations are continued to be brone by Railways.
1.8 all these losses must be quantified for subsidy and debt burden to the General Revenues attributable to these identifiable factors should be wrilten of. As is the practice on the Railways of other parts of the world, the entire loss being incurred by Indian Railways on account of social burdens should be borne by General Revenues.

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