Railway minister Mamata Banerjee may find it hard to carry forward her predecessor Lalu Prasad?s populist legacy of cutting passenger fares in each Budget. With freight traffic on the decline, the railway ministry does not have much financial leeway to announce another across-the-board cut in passenger fares in Rail Budget 2009-10. To combat the economic slowdown and woo more freight business, the ministry is looking at reducing freight on commodities such as iron ore and cement.
Rail Bhawan officials hope that reducing freight would help the Railways win over more traffic. Rail freight traffic has been sharply hit by the economic slowdown, and April 2009 saw a mere 3.05% rise in the Railways? freight loading. In the entire fiscal of 2008-09, railway freight grew a mere 4.89%, far lower than the target of 7.05%. Worst hit is traffic from bulk commodities like iron ore, steel, cement and foodgrains.
To attract more business, the ministry has already re-classified freight on iron ore used domestically to Class 180 from the earlier class of 200X. But the industry has been seeking a further cut in freight on iron ore used both for domestic use and export. Similar discounts may be given to cement as well.
?Prices of some commodities have declined with the slowdown in the economy. In keeping with our dynamic pricing policy, rail freight needs to reflect these changes,? an official said.
For passengers, the Rail Budget may announce a few concessions, but is expected to leave fares largely untouched. ?The drop in our freight business does not give us much leeway to cut fares for a second time in 2009-10,? a Rail Bhawan official said.
In keeping with its agenda of ?social responsibility?, the Railways is expected to confirm a few small fare freebies announced by Banerjee after joining office. Key among these are free rail passes to students and vendors as well as monthly passes at Rs 20 for those earning less than Rs 500 a month.
Interestingly, Banerjee hadn?t been able to tinker with passenger fares in her earlier avatar as Railway minister either. As part of the National Democratic Alliance, she presented the Rail Budgets in 2000 and 2001.
The poor financial health of Indian Railways at that time meant that Banerjee?s Budget speeches could only stress that there would be no increase in passenger fares. The focus then was on improving passenger amenities ? and is expected to be the same this time around. Banerjee has already asserted that her priority is to restore punctuality in train services, ensure ?justice? to passengers and improve cleanliness in trains.
Former rail minister Lalu Prasad had already cut passenger fares by 2% on all tickets over Rs 50 in the interim Rail Budget tabled in February. He had also reduced fares costing up to Rs 50 for non suburban mail/express and ordinary passenger trains by Re 1.