The fifth consecutive railway budget to be presented by Lalu Prasad on February 26 promises to be people-friendly, with a possible token reduction of passenger fares.
While there will be no hike in fares of any class, the minister may effect reduction in both sleeper class and upper class fares. The railway minister himself hinted this a few days ago: “I will be presenting the rail budget keeping the common man in mind. It will also have a slew of initiatives for improving facilities for passengers. There will also be a number of new initiatives”
The reduction in fares and people-friendly initiatives are mainly because of three reasons: while 2008 will see elections to 10 state Assemblies, 2009 will be the year of Lok Sabha polls. On both counts, the UPA government will have to give a good account of itself. Second reason, the Indian Railway [IR] has been earning good profits running into Rs 20,000 crore and this will make things easy for the Bihar strongman to make the budget passenger-friendly. Third, IR hopes reducing fares could, in a small way, act as a counter to low cost airlines wooing railway passengers.
Because of the good balance sheet, the last week oil price hike will not come in the way of decreasing fares. With the government announcing a hike of Rs 1 per litre, IR will incur a heavy bill of nearly Rs 400 crore per year but with the mega-organisation running into huge profits, the additional costs would be absorbed by IR, sources at Rail Bhawan told Deccan Herald here on Wednesday.
IT services
In his last budget too, the minister had made a symbolic cut of Rs 1 in fares of ordinary class fares and there was also a reduction of two to eight on sleeper and AC class fares benefiting a staggering 13 million people who travel every day by IR. The behemoth earned passenger revenue of Rs 17,400 crore in the year 2006-07, which comes to 27.6 per cent of its annual gross traffic revenue.
What else can be expected in the new budget ? As usual, the minister will announce a host of new trains, new lines etc. With IT making huge inroads in almost every aspect of railway functioning, the IR is likely to announce internet service on running trains and expand the number of wi-fi enabled stations which made a beginning with Bangalore last year. The number of stations with ATM facilities would increase.
The minister is likely to lay more stress on Public Private Partnership (PPP) which has already been introduced in IR . Now PPP is expected to play a major role in the modernisation and development of railways infrastructure.
On the freight side, which is the major bread winner for IR, the minister may reduce the rates on some commodities. The IR may achieve 780 million tonnes in freight for the current fiscal, just short of the target of 785 million tonnes. He may also announce coming fiscal allocation for new freight corridors connecting New Delhi- Mumbai – Kolkata which is estimated to cost a whopping Rs 25,000 crore.
