TAX SHARING-States at Losing End

96. The outlay for 1997-98 has been fixed at Rs 8,300 crore, which is the same as in the previous year in nominal terms. In the six years from 1991-92 to 1997-98, the railways' annual Plan outlay has gone up from Rs 5,393 crore to Rs 8,300 crore an increase of 55 per cent whereas the rise in the wholesale price index would have been easily 65 per cent. Though budgetary support to the railways' Plan in 1997-98 has been raised to Rs 1,831 crore from about Rs 1,400 crore as a special case to meet the needs of the north-eastern region and Jammu and Kashmir, the total outlay has remained unchanged because of the huge increase of Rs 3,500 crore in working expenses due to the impending implementation of the Fifth Pay Commission's recommendations. Nevertheless the railways hope to generate internally Rs 3,419 crore in 1997-98. with Rs 1,800 crore coming from higher fares and freight rates.