A modest 2-5% increase in sleeper class and suburban fares, and 10-15% rise in air-conditioned travel are likely in the rail budget that is to be presented in the Lok Sabha by railway minister Dinesh Trivedi on March 14.
Railways, which has not hiked fares for eight years in a row, is also likely to raise freight charges to garner over Rs5,000 crore additional revenues.
Besides unveiling a roadmap for a moderate rate hike every year (to mobilise resources for its ambitious Rs8.3 lakh crore modernisation plan over the next five years), the budget is expected to announce setting up of authorities for rail safety and rail fares.
Trivedi, who is committed to implementing the Sam Pitroda report on mo-dernisation and the Anil Kakodkar report on safety, is expected to levy fuel surcharge to take care of the mounting fuel bill. A rail safety cess may also be levied to raise resources for safety measures like automatic signalling and phased elimination of level crossings.
The implementation of Kakodkar report is expected to cost the railways Rs1 lakh crore in next five years and this included improving signalling and introducing automatic signalling on trunk routes, a government official said.
The fare and freight increase would be modest in the budget, the official said, adding that a view is emerging in the railways that there should be modest increase in fares on a regular basis rather than one time huge rise.
“Finances of railways are on the verge of collapse unless some concrete measures are taken,” Kakodkar report said. Passenger fares have not been increased in the last decade during which many passenger trains were introduced on the existing overloaded infrastructure, the report added. While wholesale price index has gone up by 300 per cent in the last 10 years, the second-class rail fares have remained unchanged.
The report has strongly recommended putting an end to the practice of introducing new trains without commensurate expansion of infrastructure.
The report has also recommended a statutory railway safety authority while the Sam Pitroda railway modernisation committee has mooted setting up of an autonomous empowered authority to determine railway fare structure.
In the light of these suggestions, Trivedi is expected to announce a road map for moderate increase in fare and freight every year for the next 5-10 years to put this major national infrastructure back on track.
“Railways is becoming a drag on the growth rate rather than being a sector leading growth…one would certainly have to take a closer look at revenue strategies. When fares fall below a point when they are not economically viable, it is not a good idea,” India’s chief statistician TCA Anant told Financial Chronicle recently.
Railways, which clocked 9.4% growth in 2009-10 dropped to 6.68% in 2010-11 and the advance estimates indicated a further fall to 5.5% in 2011-12. If the modernisation plan is fully implemented, it would add 2% to GDP, Anant said.
There is also a proposal to have differential fare on routes in which affluent sections of the society travel. For example, in routes like Delhi-Mumbai and other metros, fares can be raised substantially without much resistance. This can be done by working on route-based ticketing like airlines, an idea which could be easier to sell rather than a huge across-the-board increase in fares.
The budget will also initiate action to start work on India’s first high-speed bullet train with French collaboration on the Pune-Mumbai-Ahmedabad route. The pre-feasibility report of the project is completed.
The railway modernisation is to be carried out only on the crucial 19,000 km trunk routes.
The Kakodkar committee, too, has suggested that advanced signalling system needs to be adopted on the 19,000-km track based on continuous track-circuiting and cab-signalling that is similar to European train control system and this is expected to cost Rs 20,000 crore over the next five years. A special purpose vehicle may be formed for execution of this project.
Steps would be initiated in the budget for phased elimination of manned and unmanned level crossing in the country over the next five years at the cost of Rs50,000 crore as mooted by the Kakodkar committee.
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Railways, which has not hiked fares for eight years in a row, is also likely to raise freight charges to garner over Rs5,000 crore additional revenues.
Besides unveiling a roadmap for a moderate rate hike every year (to mobilise resources for its ambitious Rs8.3 lakh crore modernisation plan over the next five years), the budget is expected to announce setting up of authorities for rail safety and rail fares.
Trivedi, who is committed to implementing the Sam Pitroda report on mo-dernisation and the Anil Kakodkar report on safety, is expected to levy fuel surcharge to take care of the mounting fuel bill. A rail safety cess may also be levied to raise resources for safety measures like automatic signalling and phased elimination of level crossings.
The implementation of Kakodkar report is expected to cost the railways Rs1 lakh crore in next five years and this included improving signalling and introducing automatic signalling on trunk routes, a government official said.
The fare and freight increase would be modest in the budget, the official said, adding that a view is emerging in the railways that there should be modest increase in fares on a regular basis rather than one time huge rise.
“Finances of railways are on the verge of collapse unless some concrete measures are taken,” Kakodkar report said. Passenger fares have not been increased in the last decade during which many passenger trains were introduced on the existing overloaded infrastructure, the report added. While wholesale price index has gone up by 300 per cent in the last 10 years, the second-class rail fares have remained unchanged.
The report has strongly recommended putting an end to the practice of introducing new trains without commensurate expansion of infrastructure.
The report has also recommended a statutory railway safety authority while the Sam Pitroda railway modernisation committee has mooted setting up of an autonomous empowered authority to determine railway fare structure.
In the light of these suggestions, Trivedi is expected to announce a road map for moderate increase in fare and freight every year for the next 5-10 years to put this major national infrastructure back on track.
“Railways is becoming a drag on the growth rate rather than being a sector leading growth…one would certainly have to take a closer look at revenue strategies. When fares fall below a point when they are not economically viable, it is not a good idea,” India’s chief statistician TCA Anant told Financial Chronicle recently.
Railways, which clocked 9.4% growth in 2009-10 dropped to 6.68% in 2010-11 and the advance estimates indicated a further fall to 5.5% in 2011-12. If the modernisation plan is fully implemented, it would add 2% to GDP, Anant said.
There is also a proposal to have differential fare on routes in which affluent sections of the society travel. For example, in routes like Delhi-Mumbai and other metros, fares can be raised substantially without much resistance. This can be done by working on route-based ticketing like airlines, an idea which could be easier to sell rather than a huge across-the-board increase in fares.
The budget will also initiate action to start work on India’s first high-speed bullet train with French collaboration on the Pune-Mumbai-Ahmedabad route. The pre-feasibility report of the project is completed.
The railway modernisation is to be carried out only on the crucial 19,000 km trunk routes.
The Kakodkar committee, too, has suggested that advanced signalling system needs to be adopted on the 19,000-km track based on continuous track-circuiting and cab-signalling that is similar to European train control system and this is expected to cost Rs 20,000 crore over the next five years. A special purpose vehicle may be formed for execution of this project.
Steps would be initiated in the budget for phased elimination of manned and unmanned level crossing in the country over the next five years at the cost of Rs50,000 crore as mooted by the Kakodkar committee.
....more info