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Suresh Prabhu to unveil plans for raising resources in Rail Budget
Highlights
With Railway finances under terrible strain, all eyes will be focused on whether Railway Minister Suresh Prabhu will hike the fares and freight rates in the Rail Budget on Thursday which may contain proposals for \'Make in India\' initiatives besides enhancing safety and security
New Delhi: With Railway finances under terrible strain, all eyes will be focused on whether Railway Minister Suresh Prabhu will hike the fares and freight rates in the Rail Budget on Thursday which may contain proposals for 'Make in India' initiatives besides enhancing safety and security.
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Minister of State for Railway Manoj Sinha had earlier ruled out a reduction in fares in the context of lowering of diesel rates but Prabhu is expected to make a tight rope walk as he tries to bridge the huge gap in finances while presenting his maiden budget in the Lok Sabha.
Prabhu is likely to unravel his grand plans of how to decrease the cross-subsidy for passenger service from freight earnings which is touching Rs 24,000 crores and the steps to increase goods transportation share in the national transporter with or without hiking fares. For 10 years before 2012-13 there was no increase in rail fares. Then Railway Minister and Trinamool Congress leader Dinesh Trivedi had made an across-the-board hike in 2012-2013 but was made to roll back the hike in second and sleeper class categories.
Since then there have been hikes in passenger fares. In the first Railway budget of the Modi government in July last, fares were increased by 14.2 per cent and freight by 6.5 per cent. Though there is a decrease in diesel price, electricity cost has gone up by over four per cent making it a balancing act for the fuel adjustment cost (FAC)-lnked tariff revision policy adopted by railways since 2013.
Currently there are 676 projects worth Rs 1,57,883 crore sanctioned and out of these, only 317 projects could be completed and 359 projects remain to be completed which will now require as much as Rs 1,82,000 crore.
Considered a reformer, Prabhu may lay the road map for attracting private investment for the public transporter, which badly needs funds for completion of many crucial rail projects. Given the funds constraints, he is likely to go slow in announcing new trains and projects in the budget. Funds allocation will be made only for those projects including new lines which are strategically crucial, doubling and route electrification which are nearing completion, the sources said.
Besides seeking increased gross budgetary support of about Rs 50,000 cr for the 2015-16 fiscal, railways have sought Rs 20,000 cr from the Finance Ministry as railway safety fund to do away with unmanned level crossings, a major reason for train mishaps across the country.
Prabhu will announce joint venture mechanism for implementing projects involving state governments and other external agencies. As the railway minister has stressed on improvement in passenger amenities before increasing fares, there will be a series of measures including utilisation of CSR funds to improve amenities at rail premises.
Prabhu is expected to focus on tapping more revenue channels and could announce some innovative ways for raising resources through non-tariff methods like increasing revenues from advertisements and leveraging surplus land among others.
In line with the 'Swachh Bharat' campaign, Rail Budget is likely to give special attention on cleanliness exercise and a slew of measures like provision for dustbins in all coaches besides proposal to cover 100 more trains under 'On Board Housekeeping Services'.
Bio-toilets in trains and stations will be covered under the Clean Train Station Scheme.
Keeping with the NDA government's bullet train promise, Prabhu could announce the way forward for the ambitious high-speed train project between Mumbai-Ahmedabad and survey programmes for the proposed diamond quadrilateral route.
The budget could also announce the much-awaited plan to procure 20 train sets for operating on the Rajdhani and Shatabdi routes to reduce travel time. The budget is likely announce plans for manufacturing coaches to run at a 200-km per hour speed at its Chennai facility in keeping with the Modi government's 'Make in India' initiative.
Redevelopment of about 100 stations, leveraging empty spaces for construction of marketing complex and other commercial projects are also on the cards. Introduction of AC rakes in the inter-city services to make the journey more comfortable will also be proposed in the Rail Budget 2015-16.
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