Railway Budget: No cut in fares, new trains likely

Faced with a revenue shortfall, Railway Minister Mallikarjun Kharge will not bring about reduction in basic passenger fares in the interim budget on Wednesday but is likely to make adjustment in fuel adjustment component so that impact on fares is minimum in an election year.

Kharge is likely to announce more trains, new lines and better passenger amenities in the interim budget.

Railway Ministry sources said it will be a growth-oriented budget and not a deficit one despite fall in earnings.

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Freight and passenger earnings have shown a decline during the April-December 2013 period. While freight earnings are short by about Rs 850 crore (Rs 8.5 billion), the decrease in passenger revenue is about Rs 4000 crore (Rs 40 billion).

Though the then Railway Minister Lalu Prasad had announced a two per cent fare cut in passenger segment in the interim budget of 2009, Kharge is unlikely to do so now given the dismal financial scenario.

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However, Kharge is likely to announce measures for better amenities and safety for passengers while at the same time undertaking steps to improve the fiscal position.

The announcement of running 20 premier trains on dynamic fares as a step to arrest the fall in passenger revenue is likely to be made.

In a bid to give passengers relief from the impending fare hike in April due to implementation of fuel adjustment component (FAC), Kharge is also likely to make some adjustment in FAC so that impact on passenger fares is minimum.

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The interim rail budget will also focus on electrification of more routes so that dependence on diesel is less.

Railways are likely to take up about 1500 km route for electrification in the next fiscal. Currently, only about 24,000 km is electrified out of the total 65,000 km route.

In his first budget presentation, Kharge will talk about the progress and development work undertaken by the national transporter in the last ten years.

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Since Lok Sabha elections are around the corner, there are demands from many zones and MPs for new trains and Kharge has conceded to some demands. As a result, survey of new lines, extension and increase of frequency of certain train services are also to be announced in the vote-on-account statement.

The vote-on-account is likely to mention the expeditious work on coaching complex for maintenance facility at Gulberga.

On the mega project front, Kharge will mention the speedy work on dedicated freight corridor and work sanction on the 66 km long Mughalsarai and Sonnagar link as part of the project.

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The Railway Minister is likely to refrain from announcing any populist measures given the financial condition of the national transporter.

While the working expenses have gone up by about Rs 5,000 crore (Rs 50 billion) during April-December period, the revenue earnings have decreased by over Rs 4,000 crore (Rs 40 billion).

Though Railways have set a target of reaching 38 per cent of total cargo traffic in the 12th Plan, the cargo share of railways is expected to fall by two to three per cent this year.