Pakistan Railways is Facing A Rs. 8 Billion Deficit in 2019-20

Despite getting a subsidy of Rs. 39 billion in budget 2019-20, Pakistan Railways is still facing a deficit of around Rs. 8 billion to cater pensions, fuel and utilities liabilities in the current fiscal year.

Official sources revealed that fearing unrest due to inability in clearing pension liabilities, a summary for grant of Rs. 4.1 billion has been submitted to the Finance Ministry.

According to official documents, the government approved the budget estimates 2019-20 to the tune of Rs. 97 billion for Pakistan Railways including Rs. 58 billion revenue receipts and Rs. 39 billion under the head of subsidy. In addition, Rs. 100 million were allocated for the renovation of railways police buildings to be financed by the American Embassy which makes the allocation Rs. 97.10 billion for the current financial year.


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Against the budget estimates of Rs. 97 billion, expenses up to January 2020 were Rs. 57.949 billion i.e. 59.7 percent.

Pakistan Railways however is facing financial crunch due to increase in pension, expenses, fuel oil and increase in unit rate electricity. Due to the policy of liberalization of pension rules adopted July 1, 2015 and the decision for the restoration of commuted value of pension July 1, 2015, the burden on Railways finances is continuously increasing.

The government has opened closed pension cases for allowing pension to widows/divorced daughters as per liberalized pension rules with all consequential increases. An expenditure of Rs. 20.958 billion was incurred during July 2019 to January 2020, against the total allocation of Rs. 33.075 billion for 2019-20.

It has been estimated that an additional budget of Rs. 4.170 billion will be required under the head “employees’ retirement benefits-pension during 2019-20.

Further Railways maintained in the documents that fuel prices in the international market are continuously increasing. Prices of high-speed oil have increased by Rs 15.79 (average) per liter. An expenditure of Rs. 12.292 billion was incurred during July 2019 to January 2020 against the total allocation of Rs. 17.522 billion.

Due to an increase in prices during 2019-20, the fuel procurement plan has badly affected. It has been estimated that an additional budget of Rs. 2.208 billion will be required at current rates of HSD oil to meet the requirement of operation fuel during the current financial year.

Pakistan Railways is a bulk purchaser of distribution companies over the country. The electricity unit rates have been increased from Rs. 20.12/unit to Rs. 26.66/ unit during the current financial year so far.

An expenditure of Rs. 1.740 billion was incurred during July 2019 to January 2020 against the total allocation of Rs. 2.1 billion. Thus an additional budget of Rs. 1.224 billion will be required during the current financial year.

As per earnings and expenditure, the provincial deficit from July 2019 to January 2020 has been worked out at Rs. 2.681 billion. Total revenue earnings remained at Rs. 32.424 billion, subsidy released was Rs. 22.757 billion, and expenditure remained Rs. 57.855 billion during the first six months of the current financial year.

In the financial year 2018-19, earning of Pakistan Railways stood at Rs. 54.59 billion compared to Rs. 49.5 billion in 2017-18, the highest revenue ever achieved by the department.


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