Direction: Read the following passage carefully and answer the questions. Your answer to these questions should be based on passage only.
The news that the Indian Railways are going to incur a shortfall of Rs 1000 crore in their resources generation - and will, therefore, have to seek budgetary support to that extend - will not surprise many. That's a scenario that has been played out for years now, and the outcome, too, has been predictable - with railways budget doing is duty by doling out public money. But it's time to look at the problem differently, in view of the current concerns of the government in economizing its charity and the feeling that the railways have to stand on their own legs.
The Railways have, over the last few months, continued to experience a shortfall of Rs 85 crore per month, a feature that could add to their woes if it continue. Fall in expected goods traffic, in the rate per tonne and also a dip in passenger traffic have contributed to the shortfall. All these may not be new concerns for the Railways; the relevant point, however, is how the system and the government hope to tackle it.
Clearly, budgetary support should be considered only in the last instance, after various measures to both reduce expenditure and raise resources have been tried out. Consider subsidies on passenger traffic --- the expenditure which really digs into the government's coffers. In fact, passenger traffic subsidy accounted for nearly 90 per cent of the railways' losses in 1992/93, with freight traffic subsidies taking up the rest.
Freight traffic subsidy cuts should prove more easy if this year's budget exercise is any indication. Till now, sixteen commodities were subsidized. In 1993/94, budget subsidy on four commodities were removed. Prices did not rise, there was little protest and now the Railways ought to be emboldened to do more Reduction in passenger subsidies is more tricky given the dependence of such a large population, mostly poor, on the system and most governments have been reluctant to do much. In fact, passenger rates have been hiked very few times and that, too, only in recent years.
One area where the Railways could do a lot more pruning is in shutting uneconomic branch lines. For instance, in 1992/93 it was found that 114 branch lines contributed a loss of Rs 121 crore.
To its credit, however, the railways have been looking around for sources of funds other than the budget.