It is the populist tune once again. Lalu Prasad is likely to leave passenger fares untouched in the coming rail budget. Government sources said, there had been discussions for an-across-the board reduction in fares, but the rising fuel costs are unlikely to let this happen.
Instead, the railway ministry may go in for symbolic cuts in passenger fares, as it did in 2007-08. ?We want to keep a passenger-friendly image and a symbolic fare reduction will be a good move,? a railway ministry official pointed out.
This would be a re-run of the rail budget 2007-08, when Prasad had reduced the fares of non-suburban ordinary passenger and non-super fast mail-express trains by a symbolic Re 1 per ticket. Fares were also cut by 2% to 8% for the sleeper and AC classes.
According to official figures, fuel makes up over 18% of the railways? operating costs since 2005-06. The rising global crude oil prices make it more difficult for the railways to plan a cut-back in fares. A decision by the world?s largest transport industry to hold passenger fares could soften inflationary expectations.
Over 13 million people take trains every day in India, and passenger revenue was Rs 17,400 crore in 2006-07. This is 27.6 % of the annual gross traffic revenue of the railways. Passenger earnings grew by only 14% in that year. This means the rate of growth is marginally lower than the nominal growth rate of the GDP for the year. The lower rate of growth is attributed to a dip in the bookings for upper class tickets in most trains, especially in the off-season. The railways have been consistently losing high-end passengers to the booming airline industry over the past three years.
The simultaneous rise in costs could also diminish the euphoria over a record Rs 20,000-crore surplus (before dividend) that the railways showed in their budget for 2007-08. Rail Bhawan officials are keeping this in mind as they prepare the coming budget. But, they still hope to keep the operating ratio at about 78.7% ?which was a massive improvement in the finances of the railways.
With 2008-09 being the last budget Prasad will present before the General Elections in 2009, the main mantra will, therefore, be to keep the fares low and passengers happy.
A final decision on this front would be taken on a date closer to February, sources added. Prasad has announced time and again that his will be a people?s budget.