Trivedi to present his maiden Rail Budget fare hike looks remote

By: | Updated: 13 Mar 2012 08:22 PM

The Rail Budget to be presented on Wednesday may continue with
the practice of not raising the fares and freight rates but the
possibility of imposition of a safety cess may not be ruled out, at least
on the higher class fares.

As Trinamool Congress leader and railway minister Dinesh Trivedi rises to
present his maiden budget he is expected to carry on with the practice of
not tinkering with the second class fares like his predecessors, including
Mamata Banerjee, over most part of the last decade.

There is speculation that the budget could bring in a safety cess
following a recommendation by the Kakodkar Committee report which went
into issues relating to safety over the huge railway network.

The committee had suggested a cess to realise money to the tune of Rs
5,000 crore, to fund projects especially for safety upgradation of
signalling and telecommunication systems.

As he does the tight ropewalk, Trivedi may also introduce a mechanism to
provide cushion for meeting costs on account of any spike in fuel prices.
There is a suggestion for introducing a fuel adjustment component (FAC) in
the basic fare to insulate railways from fuel price hike.

Railways shell out Rs 19,000 crore as part of its fuel expenditure to run
its huge fleet of diesel locomotives adding to the total expenditure
placed at Rs 70,000 crore in the current financial year.

Indications are that the Railways have got only Rs 25,000 crore as gross
budgetary support from government despite its demand of Rs 50,000 crore to
tide over its financial crisis. Railways had got Rs 20,000 crore as GBS in
the current fiscal.

Trivedi could also spell out plans for internal generation of fund from
additional resources like commercialisation of stations.

Since railways have already increased the freight rate on March 6 for all
commodities ahead of budget, there may be no further hike in any freight
on goods, say highly-placed sources in the ministry.

The budget would strive to allocate a substantial amount of fund for the
depreciation reserve fund and safety fund which have suffered in recent
years in the wake of railways focus on other priority areas.

The Rail Budget could announce two new coach factories in Kolar in
Karnataka and Kutch in Gujarat. Incidentally, both the ministers of states
for Railways KH Muniyappa and Bharatsinh Solanki come from these two

Also read: Trivedi
may announce high-speed trains
| Stage
set for another Railway Budget

Budget to be presented today

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First Published: 13 Mar 2012 08:22 PM
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