Railways red flags Kisan Rail subsidy: exceeded year’s quota in August

The Railways has raised a red flag over the burgeoning operational costs of its Kisan Rail service with the subsidy it gives farmers for transportation of their produce at half-rate already exceeding the maximum of Rs 50 crore it is scheduled to get this fiscal under the initiative from the Ministry of Food Processing Industries (MoFPI), The Indian Express has learnt.

The Railways has conveyed to MoFPI that the amount required to cover the relief this year would be almost three-fold the money sanctioned, records reviewed by The Indian Express show.

In its communications with the MoFPI, the transporter broached the subject of “discontinuation” of subsidy and warned that it would lead to “dissatisfaction among the farming community”.

Records show that the Railways has so far provided Rs 70 crore worth of subsidy to farmers this year, and that the cap of Rs 50 crore got breached by August. In letters sent to MoFPI Secretary Pushpa Subrhamanyam, the Railways has conveyed that the actual amount required to cover the subsidy this fiscal would be about Rs 150 crore.

“Considering the huge popularity of this scheme and Railways’ plans to introduce Kisan Rail in newer regions, it may please be considered that discontinuation of subsidy under ‘Operation Greens TOP to Total’ will lead to dissatisfaction among the farming community. It is, therefore, requested that the Ministry of Food Processing Industries may please increase the ceiling to at least Rs 150 crores for the year 2021-22,” Railway Board chairman Suneet Sharma wrote in a letter to Subrahmanyam in August.

When contacted, officials in the MoPFI declined to comment. But sources in the Ministry told The Indian Express that it has released Rs 37 crore as subsidy for this fiscal so far. “The balance (Rs 13 crore) will be released in subsequent months,” the sources said.

They said the Ministry had requested the Department of Expenditure for more funds this fiscal and to raise the subsidy ceiling of Rs 50 crore a year, which was originally set for the entire duration of the 15th Finance Commission (2021-26).

“We don’t have much money, so we have restricted the subsidy amount to Rs 50 crore for the financial year 2021-22. We had written to the Expenditure Department asking if they can provide us additional funds on this account but they have denied the request. So now, the Indian Railways is taking up the matter with the Expenditure Department,” MoPFI sources said.

During the last financial year, records show, the Railways released a subsidy of Rs 27.33 crore under the scheme. For this period, sources in MoPFI said, the Ministry released Rs 23.33 crore to the transporter. Subsequently, the Government renewed the subsidy for this financial year, but with a cap of Rs 50 crore.

In another letter sent to the MoPFI Secretary, Railway Board Member (Operations and Business Development) S K Mohanty wrote that the amount of subsidy would be around Rs 110 crore by the end of this fiscal, going by the growth trajectory of the popular service.

“Indian Railways have been making sincere efforts to increase the reach of Kisan Rail, so that all sections of our farming community and all geographical locations get the benefit of this scheme — and as a result of these efforts, new routes and services are being included on a regular basis,” Mohanty wrote.

Kisan Rail was launched on August 7, 2020, to transport fresh fruits and vegetables from farmers to markets across India. The MoPFI introduced the subsidy scheme in October that year.

Under the “Operation Greens – TOP to Total” scheme, which was notified by the MoFPI, the 50 per cent subsidy to farmers covers the cost of transportation of popular produce, such as tomato, onion and potato. The arrangement was that while farmers would get to transport their produce at half-rate, the Railways would get the subsidy amount from the MoFPI.

Sources told The Indian Express that officials from both sides have been engaged in discussions over the last two months to resolve the impasse.

The Railways, meanwhile, has been planning to upgrade the Kisan Rail service. Sources said discussions are on to introduce air-conditioned coaches to transport produce based on feedback from farmers in parts of Maharashtra to keep fruits and vegetables fresh as they reach markets. But introducing such a product would mean incurring more cost, officials said.

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