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LATEST NEWS UPDATES | Rail Budget 2012: After a decade, all tickets to cost more

Rail Budget 2012: After a decade, all tickets to cost more

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published Published on Mar 15, 2012   modified Modified on Mar 15, 2012
-The Times of India

Railway minister Dinesh Trivedi on Wednesday did what none of his predecessors had done for almost a decade - he hiked passenger fares across the board, following up on the increase in freight charges announced immediately after the recent round of assembly elections.

While biting the bullet in hiking fares, he chose to couch the increase as ranging from a mere two paise per km for second class tickets to a maximum of 30 paise per km for AC first class tickets.

What he didn't spell out was that this worked out to hikes of 35% or more in some cases. Suburban tickets for a distance of 25km, for instance, would be up from the current Rs 7 to Rs 10, a 42% jump.

Trivedi added that railway fares would in future have a "fuel adjustment component", which would rise and fall in line with diesel prices, thereby ushering in dynamic pricing of tickets.

There was a certain irony to all his purple prose, liberally punctuated with poetic interludes: Trivedi spent a good part of his two-hour speech - one of the longest in recent memory - making grandiose promises of how he would transform the face of the railways over the next five years. Within five minutes of finishing, questions were being raised whether he would last out the day.

Given that 95 paise in every rupee the railways earned in the current year are estimated to have been used up in routine expenses (an operating ratio of 95%), the hike was perhaps inevitable, even if that's not how Trivedi's party sees it.

Taking the hikes and some optimistic revenue projections based on them into account, Trivedi has predicted that in the coming year the railways would be able to spare 15 paise from every rupee earned for investing in the future by reducing the operating ratio to 85%.

Fare hikes apart, Trivedi promised to get the Railways into "mission mode" to implement the recommendations of two committees that have recently submitted their reports on modernising the railways and on enhancing safety. He also announced the setting up over half a dozen new bodies - a mix of authorities/corporations and councils to handle everything from station development to design to high-speed corridors.

The new passenger amenities being promised include 321 escalators in various stations, AC executive lounges, coin and currency-operated ticket vending machines and a choice of menus that would be ensured through global tendering for catering services, introduction of regional cuisines and a "book a meal" scheme.

While "frankly and honestly" admitting that 487 projects already sanctioned over the years could not be completed in a time-bound manner for lack of funds, the minister merrily added his own long list of new projects to be taken up in the current year. He also announced 75 new express trains, 21 passenger trains, extension of 39 existing trains and increase in the frequency of 23 others.

Mumbai could get another elevated corridor linking CST to Kalyan in addition to the Churchgate-Virar link earlier proposed. The budget speech also suggested that improvements in tracks, signalling and trains could see trains running at 160 kmph cutting down travelling time by 20-25%.

The Railway Board itself would be restructured, the minister said, to include two new members, one to look after safety and another to deal with marketing and public-private partnerships (PPP); new mission directors would be appointed to take care of specific areas and report directly to the board.

The inclusion of a member specifically to deal with marketing and PPP comes as no surprise given the scale of investments that the minister has projected for the next five years, which mark the 12th Plan period, and the fact that the railways' internal resource generation cannot hope to fund that.

Thus, a 12th Plan investment target of Rs 7.35 lakh crore is to be funded mainly by support from the general budget of Rs 2.5 lakh crore and extra-budgetary resources (largely borrowings) of Rs 2.2 lakh crore against internal resources of about Rs 2 lakh crore. Similarly, only Rs 18,050 crore of the annual Plan outlay of Rs 60,100 crore for 2012-13 is to come from internal resources.

The Times of India, 15 March, 2012, http://timesofindia.indiatimes.com/business/budget-2012/rail-budget/Rail-Budget-2012-After-a-decade-all-tickets-to-cost-more/articleshow/12268995.cms


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