Passenger fares, freight charges likely to be hiked in Rail Budget

NEW DELHI: RAILWAY minister Nitish Kumar is expected to take forward the rationalisation of passenger fares and freight tariff in the Rail Budget scheduled to be unveiled next Wednesday. On the whole, the railway budget is expected to be a tame affair with very few new projects being announced.
Government sources say the passenger fares would be increased up to 6% while increase in freight charges would be more moderate. Suburban passenger fares are also set to see a moderate increase, unlike last year when these fares saw a sharp increase. The hike in fares and tariffs will be intended to cover increase in operating cost and is expected to be effected in such a manner that rationalisation initiated last year to reduce cross-subsidisation is reduced.
The rail budget for ’02-03 had effected an increase of 3.48% to 18.21% in passenger fares of various classes with AC chair car fares seeing the maximum hike. On the freight side, the railway minister has reduced the total number of freight categories from 59 to 32 and rationalised freight rates on a variety of products.
Government sources say, breaking from the past practice, the rail minister is unlikely to announce a slew of new projects. At best, a few minor lines may be announced. Other than that, Mr Kumar is expected to reiterate government commitment to complete existing projects, and to strengthen and augment capacity along the golden quadrilateral and its diagonals as announced in his rail budget speech for the current year under the Rs 15,000-crore National Rail Vikas Yojana.
The outlay for strengthening and augmenting the golden quadrilateral is estimated to be Rs 8,000 crore during the 10th five-year Plan period. Resources for the project is proposed to be raised by creating a special purpose vehicle.
Similarly, of the four mega-bridges announced in the current year’s budget and then included in the National Rail Vikas Yojana, the railway minister is expected to make an announcement on building a road-cum-rail bridge over river Kosi at an estimated cost of Rs 500 crore to 700 crore. A part of the funding for the project is to come from multilateral aid agencies. The railways has been in negotiation with multilateral funding bodies such as the World Bank and its affiliates for part financing of the project. The funds have yet to be tied up. Mr Kumar is also expected to announce an outlay for improved rail connectivity to the ports to ensure trade does not suffer for lack of connectivity between ports and the hinterland.
The plan outlay for railways is being increased marginally in absolute terms to Rs 12,537 crore from Rs 12,330 crore provided for in the current year’s budget. Of this, about Rs 6,500 crore is expected to come from the central government.