NEW DELHI: Lower fares and freight rates. High revenue growth and record operational efficiency in the current year. Large plan outlays to increase badly-needed capacity. Dispersed dispensing of tickets and lower fees for electronic ticketing to reduce queues at booking counters.
Tech-savvy ticket examiners armed with hand-held devices on high-end trains to reduce arbitrariness in filling up vacant berths. New trains, including high-speed trains, and additional coaches on existing trains. Railway minister Lalu Prasad’s fourth budget lives up to his reputation as a turnaround artiste worthy of a B-school case study.
However, under the glitz, the hard reality of years of under-investment and constrained capacity bites: the revenue growth projected for the next fiscal, at 12.8%, is lower than the 16% achieved this year and 15% in 2005-06. The projected growth is also lower than the probable growth of the economy measured in current rupees, indicating the Railways’ failure to keep up with the rest of the economy.
“The railway minister has reduced passenger fares across the board. He has also moderated the freight charges. These will have a beneficial impact on price stability,” finance minister P Chidambaram said in a statement. The commodities for which freight rates have been lowered include petrol, diesel and iron ore.
The Railways has achieved an operating ratio of 78.7%, a record, in the current year. This means working expenses are more than a fifth lower than total traffic receipts. This ratio had climbed all the way to 98.3% in 2000-01, leaving the Railways with little money of its own for investment or paying dividend to the government. In 2007-08, the operating ratio is projected to stay below 80%.
The lower increase in expected revenues next year indicates that the Railways has used up all slack in the system, to squeeze additional revenue out of existing capacity. The logical thing to do is to invest in hiking capacity. Mr Prasad has budgeted for a plan outlay of Rs 32,165 crore, a creditable 19% step-up over the current year’s outlay, which itself was 26.6% more than the outlay for 2005-06.
The lowering of fares in AC-1 sleeper by 3% in peak periods and by 6% in lean periods, in AC-2 sleeper by 2% and 4%, and the newly-built AC-3 sleeper by 4% and 8% will no doubt help the Railways fight competition from low-cost airlines. However, the slashing of fares by 4% in the newly-designed sleeper class coach, the Re 1 decrease in prices for unreserved travel and a 20% reduction on superfast surcharge levied on second class tickets for superfast trains will add to the Railways’ cross-subsidy bill, which stands at a whopping Rs 4,000 crore as of now
copied from http://economictimes.indiatimes.com
Sunday, March 4, 2007
Rail budget an attack on inflation: Lalu
NEW DELHI: Asserting that the Railway budget for 2007-08 was aimed at "slapping" inflation through measures to lighten the burden on the common man, Railway Minister Lalu Prasad said several measures including those against hoarding have been taken to contain prices.
"We will not facilitate the products of the hoarders and will instead give preference to the procurements of foodgrain by the Food Corporation of India", he said in an hour long post-budget press conference.
"At a time when there is increase in prices of some commodities, the Rail budget is a slap on the price rise as we have cut freight charges on petrol and diesel", Prasad said.
He said the freight rate for carrying foodgrain on return empty trip has been reduced by 42 per cent, besides lowering the overall freight slab for foodgrains.
The Minister said incentives had also been provided for FCI if the commodities are packed instead of sending them loose.
Similarly, there was a 30 per cent concession on goods sent in open wagons.
In reply to a query, the Minister said the revenue surplus is estimated to cross Rs 20,000 crore during the next financial year despite a likely loss of about Rs 4,500 crore due to cut in passenger fares. Prasad said the profitability in Railways had debunked the theory that only privatisation can bring in turn-around.
"We will allow public-private partnership, but the controlling stakes would always be with the government", he said.
He said private investments worth Rs 10,000 crore had been cleared in the container service sector.
Prasad said passengers travelling in sleeper class and 3-tier air-conditioned class will start enjoying lower fares when the high capacity bogies begin to replace the existing ones.
He said 2,500 coaches having raised berth capacity of 84 seats from the present 72 will be manufactured every year.
On the performance of Railways, the Minister said as against the 666 million tonnes freight target for 2006-07, the Railways would be carrying 726 million tonnes of freight this fiscal.
He said new proposals such as vendor coaches and additional 'Garib Rath' (poor man's chariot) trains were focused on the common man.
Copied from http://economictimes.indiatimes.com
"We will not facilitate the products of the hoarders and will instead give preference to the procurements of foodgrain by the Food Corporation of India", he said in an hour long post-budget press conference.
"At a time when there is increase in prices of some commodities, the Rail budget is a slap on the price rise as we have cut freight charges on petrol and diesel", Prasad said.
He said the freight rate for carrying foodgrain on return empty trip has been reduced by 42 per cent, besides lowering the overall freight slab for foodgrains.
The Minister said incentives had also been provided for FCI if the commodities are packed instead of sending them loose.
Similarly, there was a 30 per cent concession on goods sent in open wagons.
In reply to a query, the Minister said the revenue surplus is estimated to cross Rs 20,000 crore during the next financial year despite a likely loss of about Rs 4,500 crore due to cut in passenger fares. Prasad said the profitability in Railways had debunked the theory that only privatisation can bring in turn-around.
"We will allow public-private partnership, but the controlling stakes would always be with the government", he said.
He said private investments worth Rs 10,000 crore had been cleared in the container service sector.
Prasad said passengers travelling in sleeper class and 3-tier air-conditioned class will start enjoying lower fares when the high capacity bogies begin to replace the existing ones.
He said 2,500 coaches having raised berth capacity of 84 seats from the present 72 will be manufactured every year.
On the performance of Railways, the Minister said as against the 666 million tonnes freight target for 2006-07, the Railways would be carrying 726 million tonnes of freight this fiscal.
He said new proposals such as vendor coaches and additional 'Garib Rath' (poor man's chariot) trains were focused on the common man.
Copied from http://economictimes.indiatimes.com
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