Thursday, March 15, 2012

pulling out from ICU-a budgetary exercise

SreeNair | 6:12 AM |

The maiden  rail budget presented by Dinesh Trivedi,the Trinamool Minister cannot be depicted as pernicious for the aam aadmi.Mr Trivedi announced a hike  in passenger fares after 8 years since  the last exercise ,by two paise per km for suburban and ordinary second class, three paise per km for mail/express second class and five per paise per km for sleeper class. the increase will be 10 paise per km for AC chair car, AC-three tier and first class. AC-2 tier will cost more by 15 paise per km while AC-1 will be pricey by 30 paise per km.

The lowest fare of Rs. 2 for travel up to 10 km in a non-suburban train has been raised to Rs. 5.

Mr Trivedi said he has exercised restraint  keeping in mind the objective that it causes “minimal impact on the common man and to keep the tolerance limits in general.”

95% of the rail traffic proceeds from  general class passengers and the  balance 5 per cent is made up by those travelling in air conditioned coaches. The hike appears nominal in paise terms which may not put the lay man's budget to disarray- for those travel short distances.Long distance travellers will have to dole out more money. For example, the Delhi-Chennai sleeper class fare will go up from Rs. 488 to Rs. 600, a hike of 23 per cent, and Thiruvananthapuram to Delhi in AC two-tier will rise from Rs. 2,181 to Rs. 2,650, a hike of 21 per cent.

Emphasis has been put on safety  in Mr Trivedi’s budget and is a footstep towards  modernisation and sophistication-all of which require huge resources. Rolling stock in the next five years is expected to cost Rs. 1,70,751 crores.

A Railway Safety Authority will be set up as a statutory regulatory body. Tracks, bridges and signalling and telecommunication systems will find funded. A rail-road grade separation corporation will be  put in place to avoid butchery at unmanned rail crossings. The budget proposes to augment safety measures by  increasing the number of trains to be escorted by RPF/GRP personnel to 3,500 and desegregating the RPF helpline with the All-India Passenger Helpline.

The budget proposes to recruit at least one lakh persons in the next fiscal year, clearing the backlog of SC/ST/OBC vacancies and those in other categories, to ensure the safe running of trains and the safety and security of passengers.

Hygiene in trains and stations have been another important area where the minister has been seemingly vocal. The  Railways' green initiative would bring in  2,500 coaches with bio-toilets. 200 remote stations will be powered by solar energy. Solar lighting systems will be installed at 1,000 manned level crossing gates, and two bio-diesel plants will be commissioned at Raipur and Tondiarpet.

A pilot programme is in the pipeline to make  alternate arrangements for the wait-listed passengers.

84 model stations have been sanctioned across the country.

The extent of resources required by Railways is huge.The Kakodkar committee constituted to study safety requirements for the railways have put up recommendations for expending 1 lakh crores in 5 years .The Pitroda committee set up for modernisation of Railways have set forth a staggering amount of 5.6 crores. Money is the forerunner.Railways require 14 lakh crores for the next 10 years to full fill its promises.the Railways projected earnings to go up by about Rs 7,000 crores in next year, 25 per cent more than the expected earnings in 2011-12. The present hike would generate Rs 4000 lakhs , much needed funds at a time when Railways have failed to meet many of their earning targets.

Although the Indian railways are among the few in the world still making cash surpluses, its finances are never smooth. According to the Railways own estimates, their resources are insufficient to meet the estimated capital expenditure necessary for modernisation. Its capital outlay for the next financial year is estimated at Rs. 60,100 crores. "The funding relies heavily on borrowings."

The Indian Railways have proposed bringing down its operating ratios down to 84.9 per cent next financial year from 94.9 per cent.

"The fares have to take into account fuel hikes and roadways fares; we are still cheap compared to that. The railways was getting into an intensive care unit (ICU) and I have pulled it out."Divedi said .

"I had asked for a gross budgetary support of Rs 43,000 crore; I got only Rs 24,000 crore. How do I keep myself afloat? "The minister adds.

We have to wait and see how these imaginative ideas are put in practise.

The budget moots   a much-needed thrust to public-private partnerships in railways by planning to induct a member in the Board to specifically  pursue PPP projects.

Price of rail ticket and cargo rates would fluctuate and needs to  be revised with changing cost of diesel and electricity.

 The budget also envisages an independent  tariff regulatory authority , to detach the political game plan in manoeuvring  passenger fares and freight rates.

“I am contemplating a system of segregating fuel component in the cost associated with passenger services and call it FAC (fuel adjustment component),” Mr Trivedi told Lok Sabha. “The FAC will be dynamic in nature and will change in either direction with the change of fuel cost,” he added.

Railways spent about 25 per cent of their total expenditure on  buying fuel to run trains. India’s largest oil marketer IOC supplies 84 per cent of railways’ diesel demand.

Mr Trivedi said that he would be appointing a body of experts with representatives of customers, passengers and industry, among others to examine setting up of independent tariff regulatory body.

Minister claims that he has received more than 5000 representations seeking favoured considerations.But it is worth noting that unlike his predecessors no favouritism has been shown by the minister to a particular region ,by more or less keeping a balanced mindset when it came to allotting trains,investments.

 

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