Railway Minister Lalu Prasad Yadav presented the Railway Budget for 2005-06 in Parliament on Saturday. The Budget proposes no increase in passenger fares nor across-the-board in freight rates.

Presenting the Budget Lalu said he proposed to make "historic" changes in the goods tariff to make it simple, rationale and transparent.

In the proposed rationalisation, the goods tariff will have only 80 groups of commodities instead of the existing over 4,000 commodities.

The Railway Budget 2005-06: Complete Coverage

Each group under a main commodity head shall have a single uniform class for different commodities in the group irrespective of their being in different physical forms and shapes and their different conditions whether raw or manufactured.

With the introduction of three new classes, while the increase in freight will be contained to the barest minimum for most of the commodities, there will also be a marginal reduction in freight in certain cases, Prasad said.

To ensure that freight rates of commodities being used by common man are not increased, classes of kerosene and LPG have been reduced from 135 to 130 and 185 to 180 respectively as a result of which the freight for kerosene and LPG will get reduced to 3.7 and 2.7 per cent respectively.

The proposed rationalisation of classification of different types of chemical menus will result in reduction in freight rates of many chemical menus and increase in some cases.

Dealing with the Budget estimates for the coming year, Prasad said enthused by the trends of buoyancy in freight loading in 2004-05, the Railways are expected to carry 635 million tonnes of revenue earning originating freight traffic during 2005-06, which is 35 million tonnes more than the traffic likely to be lifted in the current year.

The originating passenger traffic is estimated to go up by about four per cent, which along with certain measures, will result in increasing earnings by 7.4 per cent over the revised estimates of the current year.

Considering the initiatives taken in parcel segment, the "other coaching" earnings are expected to grow by 10 per cent. "Sundry other" earnings are expected to grow by five per cent.

On the basis of these assumptions and considering various rationalisation measures proposed in the budget, the gross traffic receipts are estimated at Rs 50,698 crores (Rs 506.98 billion). These are Rs 4,183 crore (Rs 41.83 billion) higher than the revised estimates for the current financial year.

Ordinary working expenses are estimated to be Rs 35,600 crores (RS 356 billion), seven per cent more than the revised estimates for the current year. Appropriation to Pension Fund from revenue will be Rs 6,940 crores (Rs 69.4 billion).

Despite making an unprecedented appropriation of Rs 3,604 crore (Rs 36.04 billion) to Depreciation Reserve Fund, which is around 60 per cent more than the appropriation of Rs 2,267 crore (Rs 22.67 billion) made in the Budget estimates for the current year, operating ratio is expected to improve to 90.8 per cent.

The working ratio of 87 per cent of Budget estimates for the current year is expected to improve significantly to 83 per cent in the next year's budget estimates.

At the current dividend rate of seven per cent payable to general revenues, the dividend liability for the coming year works out to Rs 3,638 crores (Rs 36.38 billion). Along with this, payment of Rs 300 crores (RS 3 billion) towards deferred dividend, an amount of Rs 3,938 crores (Rs 39.38 billion) becomes payable to general revenues. This liability will be discharged in full, Prasad said.

These projections are expected to yield Rs 4,718 crores (Rs 47.18 billion) for the plan outlay for the current year from internal resources, the minister said.

Reviewing the physical and financial performance for 2004-05, Prasad said the revised target of freight loading has been raised from 580 million tonnes to 600 milllion tonnes and the revised freight earnings have also been increased from Rs 28,745 crores (Rs 287.45 billion) to Rs 30,045 crores (Rs 3004.5 billion).

Originating passenger traffic has also registered a growth of around six per cent as compared to the Budget target of three per cent. Total earnings to the end of December, 2004, which stand at Rs 33,900 crores (Rs 339 billion) represent an 8.3 per cent growth over the last year as against 4.1 per cent registered in the previous financial year.

The total earnings of revised estimates at Rs 46,635 crores (Rs 466.35 billion) are Rs 1838 crores (Rs 18.38 billion) higher as compared to Budget estimates. With the anticipated clearance of Rs 150 crores (Rs 1.5 billion), the budgeted gross traffic receipts of Rs 44,902 crores (Rs 449.02 billion) will increase to Rs 46,785 crores (Rs 467.85 billion).

The ordinary working expenses are likely to increase by Rs 400 crore (Rs 4 billion), mainly due to the steep post budgetary increase in fuel prices and the revised estimates for these are placed at Rs 33,260 crore (Rs 332.6 billion) as against Rs 32,860 crore (Rs 328.6 billion) in the Budget estimates.