THE 2011 railway budget, presented to the Indian parliament today by the railway minister, Mrs Mamata Banerjee, acknowledges that Indian Railways (IR) is going through a difficult phase. IR lost Rs 35 billion ($US 774 million) in 2010-11 following a 97% increase in costs mainly due to implementing the findings of the Sixth Pay Commission. IR now spends 42% of revenue on pay and a further 17% on pensions. Fuel is the third largest item of expenditure accounting for 16% of income.