For 1999-2000, he has let off railway passengers lightly keeping second class fares unchanged and modestly adjusting upper class fares. But despite the lingering recession, he has chosen to raise freight tariffs across the board by four per cent.

The railway minister proposes to garner an additional revenue of Rs 900 crore from fare and tariff changes, to be effective from April 1. The bulk of it will come from freight, which is estimated to yield Rs 700 crore. Passenger traffic, growing by eight per cent plus, will bring an additional Rs 200 crore. This estimate includes revenue from parcels.

Though there is no special package to appease Mamata Banerjee, Nitish Kumar has tried to stay on the right side of the vast body of railway users. But the revenue exercise leaves a gaping hole in the railways' planfor 1999-2000, which relies heavily on market borrowings.

The minister said the increase in freight rates had been necessitated by the rising cost of operations. However, the increase was less than the general inflation in prices, he said.

The minister also proposed minor adjustments in classifications for charges in the case of washed coal and caustic soda liquor. The increase in each case, he said, was by one step only.

In response to representations from trade to reduce the burden of idle freight traffic on short lead traffic, which is charged for a minimum of 100 km, the minister said it had been decided to allow a concession of 25 per cent in freight rate for traffic hauled for distances up to 50 km.

As for passenger fares, the minister proposed to introduce a rationalisation that took into account the difference in the levels of comfort as between sleeping accommodation and sitting accommodation, as also the superior comfort of travel in AC class.

Therefore, he said, keeping the fares ofsecond class mail/express as the base, fares in the other classes on such trains are proposed to be rationalised as follows: sleeper class fares will be 1.55 times the base fares, AC chair car three times, AC three-tier sleeper 4.5 times, first class 5.25 times, AC two-tier sleeper 7.2 times and AC first class 14.4 times.

Likewise, he said, in ordinary passenger trains, fares for sleeper and first classes would be respectively 1.55 times and 5.25 times of the second class ordinary fare. However, existing fares of higher classes which happen to be higher than fares calculated on this basis in some distance ranges would not be changed, he said.

The fares of Rajdhani and Shatabdi express trains, he said, were also proposed to be revised by making suitable adjustments in the existing fare structure. The minimum charging distance for travel in the upper classes of mail and express trains was also proposed to be revised to a uniform figure of 100 km.

The freight traffic for the year 1999-2000 has beenprojected at 450 million tonnes, which was the target for 1998-99 also, but which failed to materialise due to the industrial recession. The estimates have been revised to 424 million tonnes. The minister expected higher freight traffic next year due to acceleration in economic growth.

The minister also forecast 8.5 per cent growth in passenger traffic based on the proposed augmentation of load in popular trains and other improvements in the pattern of train services.

Taking into account a five per cent increase in other coaching and sundry other earnings, the railways' gross traffic receipts are estimated at Rs 32,411 crore including realisation of Rs 200 crore of outstanding dues.

Ordinary working expenses have been estimated at Rs 25,740 crore, 10.1 per cent higher than the revised estimates of the current year of Rs 23,375 crore. The increase of Rs 2,365 crore provides for higher levels of expenditure on materials and contractual payments required for maintenance purposes.

The estimates alsoprovide for normal increases like staff recruitments, dearness allowance, lease charges on account of market borrowings, fuel etc, Nitish Kumar said.

The pensionary liability has been estimated at Rs 3,300 crore. Appropriation to the pension fund from revenue has been proposed at Rs 2,954 crore as compared to Rs 3,425 crore in the revised estimates of 1998-99. It is also necessary to withdraw an amount of Rs 200 crore from the balance in the fund, Nitish Kumar said. An appropriation of Rs 1,589 crore, as against Rs 1,600 crore in revised estimates of the current year, is proposed to be made to the depreciation reserve fund. In this case also, the minister said a drawdown from the fund balance would be required to the extent of Rs 600 crore.

Total working expenses would thus amount to Rs 30,283 crore leading to net traffic receipts of Rs 2,128 crore. Miscellaneous receipts are estimated at Rs 430 crore and thus a net revenue of Rs 2,558 crore is reached.

Payment of dividend to general revenues has beencomputed at Rs 1,914 crore as against Rs 1,752 crore in the revised estimates of the current year based on the Railway Convention Committee's report relating to 1997-98. Necessary adjustments, if required, would be made on the committee's further recommendations, the minister said.

The "excess" in the financial results, the minister said, worked out only to Rs 644 crore "which falls very much short of the segments of Plan expenditure to be met from Development Fund and Capital Fund together totalling Rs 1,765 crore."

The minister said there was thus an additional requirement of Rs 1,121 crore for financing the works chargeable to these two funds. A part of the requirement, he said, was proposed to be met by a drawdown from the balance in the capital fund to the extent of Rs 200 crore, the interest on the fund amounting to Rs 21 crore, leaving an amount of Rs 900 crore to be mobilised additionally.

The Plan outlay has been kept at Rs 9,700 crore, an increase of Rs 945 crore over the revised estimates oflast year. The increase, the minister said, had been possible due to the increase from Rs 2,200 crore last year to Rs 2,540 crore in capital available from the general exchequer. The 26 per cent increase was the highest in percentage terms, the minister said, since 1993-94. He urged the finance minister to increase the support by another Rs 200 crore.

The minister proposed to withdraw Rs 1,000 crore from Railway Fund balances as the slowdown in freight traffic in the current year and pay commission liabilities had adversely affected the railways' internal resource generation. Market borrowings by Indian Railway Finance Corporation would provide the balance requirements of funds for the plan, he said.