Railway Budget 2014: Bold reforms, tariff authority proposed

Last Updated: Wednesday, February 12, 2014 - 19:16

New Delhi: The interim Railway Budget for 2014-15 Wednesday contained reforms proposals for opening the sector to domestic and foreign investors and a tariff authority to rationalise fares and freights, end cross subsidisation and enlarge the dynamic fare scheme.

The vote-on-account Budget, presented by Railway Minister Mallikarjun Kharge, do not contain any revision of fares and freight rates in keeping with the tradition of not tinkering with them since it is for the first four months of next fiscal.

The Budget proposed introduction of 18 new premium trains, 38 express trains and 5 passenger trains.

Kharge, who took charge of the ministry after the exit of Pawan Kumar Bansal eight months ago, said apart from attracting private investment from domestic sectors, a proposal is under consideration to enable foreign direct investment (FDI) to foster creation of world-class rail infrastructure.

He said an independent Rail Tariff Authority is being set up to advise the government on fixing of fares and freight rates.

"This would lead to an era of rationalisation of fares and freight structures for improving the fare-freight ratio and gradually bringing down cross-subsidisation between different segments," said the Minister who had to cut short his speech and lay it on the table admist din over Telangana issue.

The Minister also announced starting of more high-speed trains and said the Ministry was exploring low-cost option of semi high-speed trains on select routes moving at 160-200 km per hour.

The annual Rail Plan has been pegged at Rs 64,305 crore with a budgetary support of Rs 30,223 crore.

Referring to the premium AC special train introduced on Delhi-Mumbai sector with shorter advance reservation period, Kharge said, "The fare charged includes a dynamically varying premium over Tatkal fare of Rajdhani services."

"Such dynamic pricing was widely appreciated by the users ... We are considering operation of this scheme on a larger scale," he said.

Kharge said projects in pipeline involving private partners through public-private partnership (PPP) route related to rolling stock manufacturing units, modernisation of railway stations, multi-functional complexes, logistics parks, private freight terminals, freight train operations, liberalised wagon investment schemes and Dedicated Freight Corridors.

The Rail Land Development Authority, set up with a "challenging target" of Rs 1,000 crore, had already raised Rs 937 crore, he said.

Announcing that the governments of Karnataka, Jharkhand, Andhra Pradesh and Haryana had agreed to share cost of several rail projects, Kharge appealed to other state governments to follow suit to create rail infrastructure in their respective areas.

A joint feasibility study for Mumbai-Ahmedabad high-speed corridor, co-financed by the Railways and Japan International Cooperation Agency, which started in December last year, would be completed in 18 months, he said.

For the same corridor, a business development study undertaken by French Railways would be completed by April this year, the Minister said.

Besides, the department also intended to explore low cost options for raising speeds to 160-200 km per hour on existing select routes like Delhi-Agra and Delhi-Chandigarh.

The Minister also spelt out a series of steps including SMS alerts, ticketing on mobile phones in the unreserved segment and online booking of meals in trains. "IT has revolutionised our customer interface over the last few years. We intend to continue the process," he said.

On the financial performance of Railways, he said the department had met from own resources total additional impact of Rs one lakh crore because of 6th Pay Commission.

"We are confident of surpassing the freight earnings target which has been increased to Rs 94,000 crore from Rs 93,554 crore in budget estimates. Considering the trend of passenger earnings, the revised target has been kept at Rs 37,500 crore," Kharge said.

Considering the trend of earnings and expenditure, the revised plan outlay stands at Rs 59,359 crore. The operating ratio was likely to be 90.8 percent as against the budgeted target of 87.8 percent.

"In a marked improvement from the two earlier years, Railways will end the current year with surplus, and fund balance would increase from Rs 2,391 crore at the beginning of the current fiscal to Rs 8,018 crore at the end of March 2014," he said.


First Published: Wednesday, February 12, 2014 - 19:16

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