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The stated number of new hires is for posts already advertised. Minister Pawan Kumar Bansal said as many as 22 million applications were received for 152,000 posts, "a measure of the popularity of railways as an employer".
The move, though expected to be applauded politically, raises a series of questions on the financial liabilities of the already stressed organisation. A significant increase in employee strength would not only mean higher expense; the government would also have to justify their productivity.
Revised gross traffic receipts were Rs 125,680 crore in the current financial year, ending March 31.
With 1.4 million employees, the revenue earned per person is Rs 8.97 lakh. For 2013-14, the budgeted gross traffic receipts are Rs 143,742 crore; with an additional employee strength of 1.55 million, the revenue earned per person is estimated to increase to Rs 9.27 lakh.
However, there's also an additional cost for the increased headcount. The revised estimates of 2011-12 (another 80,000 were hired that year) say the cost was Rs 19,317 crore for salaries, plus Rs 21,904 crore and Rs 1,233 crore on allowances and travel expenses, respectively. For 2012-13, it had budgeted Rs 19,937 crore on account of salaries and Rs 25,472 crore and Rs 1,113 crore for allowances and travel expenses, respectively. These costs are likely to rise with more people joining.
Of the 12th Plan (2012-17) investment target of Rs 5.19 lakh crore, all that the railways are expected to generate internally is Rs 1.05 lakh crore, about a fifth. But in the first year of the Plan, it managed to generate internal resources of only Rs 10,000 crore, leaving Rs 95,000 crore for the remaining four years of the Plan period. "The onerous task of raising the balance amount of Rs 95,000 crore in the next four years calls for a paradigm shift in our approach to tariff and non-tariff segments of earnings," Bansal said during his budget speech.
Other welfare benefits mentioned by Bansal, included Rs 300 crore more for building staff quarters and providing hostel facilities for single women employees.
He also announced plans for imparting skills to youth in railway-related trades in 25 locations, setting up multi-disciplinary training institutes.
