Jaitley wants to collect the annual dividends that the railways receive from the 14 central public sector units (CPSUs) under its purview. Prabhu is not amused as the saving on dividend payments to the MoF was one of the biggest arguments made in favor of scrapping the separate Rail Budget. The Railways ministry has shot back arguing that giving away the dividends from the CPSUs - estimated at about Rs 850 crore for 2017-18 - would hit its earnings.
In its communication in January, the Finance Ministry told the Railways Ministry that since the 'capital-at-charge' of the Railways - on which annual dividend was paid by the Railways - would be wiped-off post the Budget merger, the investment made in the Railways-related PSUs would be treated as having come from the Central government's accounts. 'Capital-at-charge' is the Centre's investment in the Indian Railways - treated as a loan in perpetuity.
"In view of this, the Ministry of Railways is requested to remit the dividends received from its CPSUs to General Revenues," the Finance Ministry said in its letter of January 9.
However, the Railways Ministry said in its reply to the Finance Ministry on February 13 "the existing financial arrangements with regard to Railway revenue and expenditure has thus to continue even after the merger..."The government approved the merger of Railway Budget with General Budget on the premise that, besides maintaining its distinct entity as a departmental commercial undertaking as at present, Railways would also retain its functional and financial autonomy."
The Railways Ministry said the dividend received by the Indian Railways from its CPSUs is not part of the 'capital-at-charge'. It went on to point out that since the dividends from CPSUs is a part of the Railways' overall traffic earning projections for 2017-18, remitting the dividend to the Finance Ministry "would add to the shortfall in the Railway earnings."
Prabhu and Jaitley at war
By IndianMandarins - 2017-02-21 10:25:06
Jaitley wants to collect the annual dividends that the railways receive from the 14 central public sector units (CPSUs) under its purview. Prabhu is not amused as the saving on dividend payments to the MoF was one of the biggest arguments made in favor of scrapping the separate Rail Budget. The Railways ministry has shot back arguing that giving away the dividends from the CPSUs - estimated at about Rs 850 crore for 2017-18 - would hit its earnings.
In its communication in January, the Finance Ministry told the Railways Ministry that since the 'capital-at-charge' of the Railways - on which annual dividend was paid by the Railways - would be wiped-off post the Budget merger, the investment made in the Railways-related PSUs would be treated as having come from the Central government's accounts. 'Capital-at-charge' is the Centre's investment in the Indian Railways - treated as a loan in perpetuity.
"In view of this, the Ministry of Railways is requested to remit the dividends received from its CPSUs to General Revenues," the Finance Ministry said in its letter of January 9.
However, the Railways Ministry said in its reply to the Finance Ministry on February 13 "the existing financial arrangements with regard to Railway revenue and expenditure has thus to continue even after the merger..."The government approved the merger of Railway Budget with General Budget on the premise that, besides maintaining its distinct entity as a departmental commercial undertaking as at present, Railways would also retain its functional and financial autonomy."
The Railways Ministry said the dividend received by the Indian Railways from its CPSUs is not part of the 'capital-at-charge'. It went on to point out that since the dividends from CPSUs is a part of the Railways' overall traffic earning projections for 2017-18, remitting the dividend to the Finance Ministry "would add to the shortfall in the Railway earnings."
