Rail Budget: Will Bansal bite the bullet on fare hike?

Railways has come under fresh pressure to further hike passenger fares, at least in a small way, and revise freight rate in the wake of virtual decontrol of diesel price but whether Railway Minister P K Bansal bites the bullet in the Rail Budget remains to be seen.

Bansal is likely to announce a slew of passenger-friendly measures such as improvement in catering service, development of stations and launching of about 100 new trains in his maiden budget on February 26.

All attention will be, however, on passenger fares as Bansal had recently told reporters that the increase in diesel price following the fare hike has negated the additional revenue which Railways expected to mop up by Rs 3,300 crore.

Cash-strapped Railways had effected passenger fare hike across the board by 21 per cent on January 22, aiming to mop up an additional revenue of Rs 6,600 crore.

Bansal has had several round of discussions with Prime Minister Manmohan Singh, Finance Minister P Chidambaram and the Planning Commission in connection with the Rail Budget.

He is also understood have discussed the possibility of fare hike with Congress president Sonia Gandhi.

However, sources said a section inside the Congress is not inclined towards effecting another round of hike as general elections are not far away.

The budget could also see some tinkering in freight rates despite resistance from the industry in the wake of slow economy growth.

Bansal is likely to announce the proposal for setting up of Rs 1,000 crore MEMU (Mainline Electric Multiple Unit) coach factory in Rajasthan to cater to the growing demand of more local and suburban trains. Railways will sign an agreement with BHEL and Rajasthan government soon for manufacturing about 400 coaches in a year.

Aiming to put rescue and restoration work during accidents on fast track, the Rail Budget 2013-14 will announce procurement of two high-speed self-propelled accident relief trains (SPART).
The SPART will enable rescue equipment to reach the accident site faster and help speedy rescue and restoration work.

Railways is likely to miss the revenue target of Rs 1.35 lakh crore for the current fiscal as the total earning for the 10 months from April, 2012, to January, 2013, has been Rs 1,01,223 crore, which means it needs to earn Rs 34,000 crore in the next two months to meet the target.

Despite the freight hike in March 2012, Railways is set to miss its freight earning target of Rs 89,339 crore this fiscal as the total goods earnings for the last 10 months from April to January is Rs 70,067.36 crore.

Even the freight loading target of 1,025 million tonnes (MT) is likely to fall short by 15 MT as Railways could transport only 927.90 MT during the last 10 months.

The total passenger earnings for the period of 10 months have been Rs 25,924 crore, whereas the target for the current fiscal is Rs 36,000 crore.

Railways, which had got Rs 24,000 crore as general budgetary support (GBS) in the last budget, sought Rs 38,000 crore from the government. It is likely to get about Rs 28,000 crore as GBS in the Rail Budget 2013-14.

The annual plan size of Railways was slashed down to Rs 52,000 crore from Rs 61,000 crore for the year 2012-13 due to the overall cut in the expenditure. Annual Plan size may touch Rs 65,000 crore in the next fiscal.

In the last Rail Budget, Railways had predicted its operating ratio to be 84.9 per cent, whereas at present, its operating ratio is hovering around at an unhealthy 88 per cent to 89 per cent.

As far as rolling stock programme is concerned, the announcement will be made for manufacturing of 4,200 new coaches including 600 LHB (Linke Holfmann Busch) coaches in the Rail Budget.
While provision for manufacturing of 670 new locomotives including 20 LNG locos will be made, the Budget will also account for manufacturing of about 16,000 new wagons.

Railways proposes to run as many as 70 heavy haul freight trains over the next year in a move which will not only help decongestion of the busy trunk routes but also enable it to manage its freight traffic till the dedicated freight corridor takes shape.

Despite cash crunch, funds are likely to be announced in the Rail Budget 2013-14 for long pending projects that include laying new lines, electrification, gauge conversion and doubling.

Currently, there are about 347 rail projects worth Rs 1.47 lakh crore pending. Railways is planning to complete some of these works in the next fiscal.

Certain pending projects involving laying of new lines as last-mile connectivity are being identified and funds will be allocated in the budget for completion of those tracks.

Planning Commission has earmarked Rs 1,94,221 crore as General Budgetary Support (GBS) for Railways in the 12th Five-Year Plan. It has asked the national transporter to earn Rs 1,05,000 crore from internal generation and Rs 2,20,000 crore through extra budgetary resources during (2012-17).

Railways expect to generate Rs 7,000 crore revenue from internal generation and Rs 18,000 crore from market borrowing in next fiscal.

Government may soon notify some works connected with the Railways like afforestation and construction of approach road for crossings under its ambitious rural job scheme which is likely to find a mention in the budget.

Industry has called for speedy implementation of key railway projects such as the Dedicated Freight Corridor, high- speed rail corridors, rolling stock and other capacity enhancement works in the Rail Budget 2013-14.

In response to the industry demand Railways will announce some initiatives to encourage public-private partnerships in rail sector.