Railway Budget: Biting the bullet
The Railway Minister
changed course from previous year's populist budget and hiked passenger fares,
while rationalising freight charges, in an attempt to reduce cross-subsidisation. The Minister's move to refrain from hiking freight charges, while
aimed at ensuring competitiveness of Railways vis-à-vis road transport, is likely
to come as a sigh of relief for Indian industry, which is passing through tough
times.
A welcome move by the
Minister has been formulation of a new arrangement whereby funds for project
implementation in different states will be determined by 3 criteria, viz. area
of the State, the population and the throwforward of projects in states. The
aim of this arrangement is to remove any perception of inequity with respect
to resource allocation amongst States.
However, a surprising
feature of the Budget is the decision to set up bottled water plants, through
the Indian Railway Catering and Tourism Corporation. A pilot project for the
provision of six 'budget hotels' is also on the anvil. The decision appears
all the more baffling, as earlier this month the Government has sold hotel properties
of India Tourism Development Corporation and Hotel Corporation of India.
Key features of Railway Budget
2002-03
- Passenger fares hiked by an average of 8%.
- Number of freight classes for commodities reduced
from 59 to 32.
- Freight rates for key commodities such as coal,
iron ore and raw material to steel plants to increase marginally. However,
iron and steel, pig iron, cement and most petroleum products to attract marginally
lower freight rates.
- Cost of some essential commodities to be marginally
higher on account of freight rationalisation.
- No increase in parcel and luggage rates.
- 16 Jana Shatabdi express trends and 25 additional
express trains to be launched this year.
- 214 route kms of new lines, 542 route kms of
gauge conversion, 250 kms of doubling and 375 route kms of railway electrification
to be completed in 2002-03.
Budget targets for 2002-03
- Net Railway revenue projected at Rs 23.39 bn.
- Passenger traffic estimated to grow by 4%, resulting
in earnings increasing by 10% over revised estimates of Rs 114 bn for 2001-02.
- Freight traffic fixed at 510 mn tonnes, an increase
by 21 mn tonnes over the revised estimates for 2001-02.
- Sundry earnings estimated at Rs 10 bn, a rise
of 11% over revised estimates for 2001-02.
- Dividend payable to the Government fixed at
Rs 26.79 bn.
YOU MAY ALSO WANT TO READ:
The Rediff Budget Special
The Railway Budget 2002-03
The Rediff-Dun & Bradstreet Budget Analysis
Run-Up To The Budget
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