In the railway budget 2013-14 presented in Parliament on Tuesday, the Congress’ Pawan Kumar Bansal resisted the temptation for another grand vision for the financially stressed and operationally crippled national transporter ahead of an election year, but batted responsibly by setting economical revenue targets and realisable capital investment goals. Clearly focused on the short term — this would likely be UPA-II’s last rail budget before the 2014 elections — Bansal has sought to reduce the cross-subsidisation of passenger fares by freight even as he refrained from hiking passenger fares, revised as recently as last month. This is obvious from a projected 30% increase in passenger earnings from a mere 5.2% increase in the number of passengers.
More than a third of railways’ gross traffic earnings comes from the goods segment right now, thanks to inadequate pass-though of costs over several years to passengers, especially those who travel in the lower-class coaches.
For the record, Bansal announced automatic revision in freight to factor in fuel costs every six months, starting with an average 5.8% rise in freight of major commodities from April 1. This could rake in R4,200 crore, more than offsetting the rise in fuel cost — R3,300 crore annually — due to the recent deregulation of bulk diesel prices. Fuels account for 26% of the railway’s operational expenses and Bansal said that the electricity and diesel price revisions in 2012-13 would inflate the transporter’s fuel bill for 2013-14 by R51,00 crore. Another R881 crore is expected from raising passenger reservation and related charges.
Freight revenue is estimated to increase just 9% in 2013-14 as against this year’s 24%, while the gross traffic receipts (GTR) are set to rise 14%. So, over and above the recent hike in passenger fares, more differential pricing and segmentation could be expected in this segment. (One profit centre could be the new Anubhuti coaches in select trains.)
To his credit, Bansal, the first Congress minister to present a rail budget in 17 years, showed the resolve and tenacity to disentangle the pricing of the national transporter’s services and distribution of its investments from political considerations and favouritism. The new projects and 93 new trains he announced were spread out evenly, while Arunachal Pradesh is set to be connected to the country’s vast rail network. A proposal for setting up a Rail Tariff Authority, he said, was being formulated and discussed among ministries.
The freight revenue target based on a