Railway Budget 2013: UPA express slows at poll signal

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SummaryIn 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.

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 meagre 4% projected rise in loading, seems modest, especially since Bansal endorsed the policy of automatic fuel surcharge. Also, the GDP growth next year is not likely to be slower than this year’s estimated 5%. GTR for 2013-14 are estimated to be R1,43,742 crore, up 14% over the current year in which the GTR increase is seen at 21%. Ordinary working expenses for 2013-14 is estimated to grow at the same rate as the GTR, to R96,500 crore.

The operating ratio, which shows how much is left with the railways after meeting the ordinary operational expenses from its own revenue receipts, is estimated to improve only marginally to 87.8% in 2013-14 from the revised estimate of 88.8% (original estimate 83.7%) for the current year. This, again, reflected the modesty in target-setting.

The OR remained at over 90% in the four years to 2012-13, with the worst ratio of 95.3% reported in both 2009-10 (that saw the effect of the Sixth Pay Commission award on wage/pension bills) and 2011-12. The excess left after payment of interest (4% for 2013-14) on the soft loan from the government, would be appropriated to the Development Fund (Rs 3,550 crore), Capital Fund (Rs 5,434 crore) and a newly created Debt Service Fund (Rs 4,163 crore), which would initially meet the debt-servicing liabilities for the World bank and JICA loans for the Dedicated Freight Corridor.

Bansal’s proposals for allocation to the various railway funds (including Rs 22,000 crore to the pension fund and Rs 7,5000 crore the depreciation reserve fund used to replenish existing assets) and the plans to raise the combined balance of these funds to Rs 30,000 crore by the end of the current Plan period don’t look very ambitious either. These funds have been depleted drastically since 2007-08, when their combined closing balance stood

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