COVID-19 Effect: Railways To Cut Expenditure By 25 Per cent; Prioritise Works


With the earnings shrinking fast in rail sector due to the deepening economic turmoil caused by the COVID-19 pandemic, Indian Railways has decided to reduce the overall expenditure considerably to manage the unprecedented situation.

Review of all high value purchase orders, cut in energy bill, travel allowance, overtime booking hours, procurement of material stock and office stationeries among others are being listed for possible expenditure reduction in the time of pandemic which has adversely impacted business and industry including rail sector.

According to the directive, now focus would be on completing important last mile works and safety related projects.

In view of the huge throw-forward liability, fresh contracts are to be entered into for essential and inescapable works only, according to the latest guidelines.

In a letter to all General Managers of railway zones and production units, Railway Board has asked for prioritising works while reducing expenditure by upto 25 per cent while prioritising works.

In view of the impact on Indian Railways’ resources due to COVID-19 pandemic, Railway Board has now approved cut in the spending, the Board letter stated.

Seeking strict compliance of the order, it has directed expenditure reduction on budget outlays in all plan-heads.

Six weeks into the new fiscal, revenue earnings have dipped in freight segment due to the low demand in core sector while the regular passenger operation has been suspended due to the lockdown.

Acknowledging the expenditure cut directive, General Manager of a high density zone said steps are underway to cut expenditure by 25 per cent and accordingly instructions have been issued to all concerned.

Since earnings have reduced due to prolonged lockdown, there is an urgent need to control and reduce the overall expenditure to the extent possible, the zonal railway GM has written to all Divisional Railway Managers and department heads in his zone.

In view of the impact on Indian Railways resources due to the pandemic, there is a need for cut in spending.

“Since the revenue earnings position is very grim and emerging scenarios are not bright in the next few months, due control mechanism is needed so far as to alleviate the overall impact on railway operating ratio,” the GM letter stated.

Though freight operation has not been stopped, loadings are on downslide due to the economic downturn.

Amid the suspension of passenger service, Railways is continuing with Shramik Specials and AC Specials to ferry stranded passengers.

In a mission mode, Railways is ready now to run 300 “Shramik Special” trains daily to transport more than 4 lakh stranded persons across the country.