Economic Times New Delhi 30th January
2002
By J Padmapriya
For the third year running, the Railways
propose to defer their dividend liabilities amounting to Rs 2,000 crore, citing
poor internal resource generation.
Sources said a compromise on the dividend
payments is expected to be reached by both the railway and finance ministers
prior to the Budget.
The exchequer stands to lose up to Rs 2,000
crore on the non-tax receipts in the ensuing fiscal from this traditionally big
dividend payer. Over the last two years, Railways have accumulated a deferred
dividend liability account touching Rs 2,500 crore.
Experts said faltering
on dividend payments, that too for three consecutive years, is a sure sign of
ill financial health and poor policy management. The Centre's balance sheet is
also affected as the expected dividends from various government bodies are
factored in while preparing the receipts Budget.
Interestingly, the government has dipped
into the reserves of cash-rich public sector units with nil investment plans to
make up for its receipts shortfall. It has also sent out directives to all departments
to pay up the mandated dividend amount. As a strategy, the finance ministry is
keen on lapping up monies wherever visible to enhance its balance sheet.
But, railways is one area where even the
mandatory dividend to be paid has not been realised. For instance, Railways
were to pay the government Rs 583 crore as dividend for 2000-01. But, what the
exd1equer has got so far is Rs 307 crore,
For 2001-02, the dividend to be paid stands
at Rs 1,352 crore with the deferred amount of Rs 1,000 crore, Railways would be
expected to pay Rs 1,352 crore to the general exchequer for 2001-02, sources
said.
The Railway Convention Committee had
recommended a 7 per cent dividend.
Railway sources said a shortfall in
freight earnings would dent internal resource earnings. As per freight data
till November 2001, Railways have managed to move 323.75 million tonnes against
the targeted 500 million tonnes for the whole fiscal.