The railways has paid over Rs 29 lakh to a premier research institution to conduct a study on computing the value of social service obligation being borne by them, Union minister Rajen Gohain said in the Rajya Sabha today.
In a written reply, he said while there is no subsidy on passenger and freight segment, the railways carries out certain transport activities which are uneconomic in nature and in the larger interest of the country.
"The Indian Railways had appointed the National Institute of Public Finance and Policy (NIPFP) in 2017 for study of developing a mechanism for computing the value of Social Service Obligation (SSO) being borne by the Indian Railways. Rs 29,50,000 has been paid to NIPFP for this study.
"NIPFP had submitted a Report on Social Service Obligations of IR dated November 28, 2017. The report is under consideration," the minister of state for railways said.
The railways continues to incur losses every year by performing a variety of un-remunerative services and most of these losses are due to low ordinary second class fare, low suburban and non-suburban season ticket, loss on essential commodities carried below cost, and a variety of concessions granted on passenger ticket, he said.
"Working of uneconomic branch lines, too, imposes a heavy burden on Indian Railways' finances. A gap is thus created between the revenue income generated through these services and their cost," Gohain added.
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