Budget doesnt depict a promising future for railways

Written by RN Misra | Updated: Feb 27 2013, 09:11am hrs
In January 2013, the railway minister had announced a fare hike, which was overdue for several years. As expected, the Rail Budget 2013-14 did not propose any further increase in fares. The hike ranged from 2 paise a km for Class II ordinary (suburban) passenger to 10 paise for AC Chair Car. The fare hike in AC2 and AC1, as was proposed in the previous budget, has been kept intact.

But the increase in fares across the board cannot be justified because it has given no relief to the common man whose only affordable means of transportation is the railways. In the budget, the minister should have spared second-class ordinary passengers up to 100 km. They are the bulk users of the railways and belong to the economically lower strata of the society. How can the present budget justify the UPAs inclusive model of growth

Even otherwise, adopting an easy formula, or creating dependence on effortless earning of revenue through fare hike, is not proper for the real growth of railways economy. This provides just an incremental value to adjust with the inflationary pricing trend, but cannot be treated as a solution to earning income for a long-term investment process and modernisation programme. The present budget proposes to earn R6,600 crore from fare hike.

The railways cannot come out as a shining and promising sector unless it proposes untiring efforts to increase volume of traffic to the tune of 3- 5% more than the real GDP rate of growth. In the present situation, it should be near 8-10% of growth in freight as well as passenger traffic.

The railway ministers proposal for increasing freight traffic forms the mainstay of internal resource generation. Bansal said: The railway has set out to achieve the milestone of entering the 1 billion tonne select club, joining the Chinese, Russian and US railways. He added: This year, the originating freight loading is estimated to be 1,007 MT, about 38 MT over 2011-12. It has become a major heavy-haul transporter by running above 10,000 tonne load.

However, the earnings from goods traffic do not show an encouraging result. Total earning from goods, proposed at R89,330 crore in 2012-13 (BE), was reduced to R85,056 crore (RE) a decrease of R3,383 crore. How can R93,554 crore be earned through goods traffic for 2013-14 A slowdown in freight traffic has set in. Keeping this trend in mind, the freight loading for 2012-13 has been revised to 1,007.00 MT from the budgeted level of 1,025.00 MT and might fall further when calculated for actual estimate.

The budget does not depict any promising future for railways as the volume of traffic and earnings are deceasing, capital fund is falling from the revised estimate of R942.15 crore to R515.57 crore for 2011-12 and the total passenger earnings are decreasing from R36,073 core (BE) to R32,500 crore (RE) for 2012-13. How can a robust traffic scenario be presented when the system, as a whole, is sinking

The writer is a retired professor at Greater Noida Institute of Technology and a commentator on railways finances