Sucheta Dalal :No increase in passenger rail fares slew of sops in budget
Sucheta Dalal

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No increase in passenger rail fares, slew of sops in budget  

July 3, 2009


Indian Railway, the world's largest rail service, earns 65 paise of every rupee it earns from goods transporting compared with just 27 paise from passengers. The railways spends 36 paise on its 1.4 million employees and spends just 3 paise on development, which means there is no real hope for a better rail service in near future.
In a thanks-giving budget, Railway Minister Mamata Banerjee Friday proposed no increase in passenger fares or freight tariff while announcing a slew of measures including launch of 12 non-stop point-to-point long-distance trains and air-conditioned double-decker coaches for inter-city travel, reports PTI.
Banerjee proposed an outlay of Rs407.5 billion for 2009-10. Out of this, Rs29.2 billion will be spent on new lines, Rs17.5 billion on gauge conversion and Rs11 billion on passenger amenities and Rs4.24 billion will also be spent on railway staff amenities. She proposed freight loading target of 882 million tonnes (mt) and estimated gross freight receipt at Rs884.2 billion.
Giving an overview of financial performance of the Railways in 2008-09, the Minister informed that freight loading during the period grew by 5% while traffic receipt increased by 11.4% to reach Rs798.6 billion. Gross traffic receipts have been estimated at Rs884.19 billion, which is Rs 85.57 billion more than 2008-09.
Her proposals included introduction of 57 new train services, extension of 27 new trains and increase in frequency of 13 trains and making 'Tatkal' scheme more user-friendly by reducing the advance booking period from five days to two days and minimum charge from Rs150 to Rs100.
Announcing "landmark" initiatives, Banerjee said that dedicated freight corridors have been declared as 'Diamond Rail Corridors' while foundation was being laid for development of Eastern Industrial Corridor along side the Eastern Freight Corridor.
Railway land banks will be set up to catalyse development in the corridors.
The Minister announced setting up of a new coach factory at Kanchrapara-Halisahar Railway Complex in West Bengal with annual capacity of 500 electrical multiple units (EMUs) and MEMUs and Metro coaches in joint venture private-partnership mode.
Strict monitoring will focus on extensive availability of 'janata khana' (low-cost meals), national and regional cuisines, development of 50 stations as world class stations and upgrading of 375 stations as 'adarsh' (model) stations.
Construction of multi-functional complexes will be undertaken at 50 stations serving centres of pilgrimage, tourism and industry. They will have shopping facilities, food stalls and budget hotels.
Banerjee also announced 'on-board house-keeping scheme' to cover 200 additional pairs of trains, improved linen management with modern, mechanised automated laundries and on-board availability of doctors in long-distance trains.
Ambulance services would be provided in seven cities to start with.
On board infotainment services will be provided in important long distance inter-city trains while toilet facilities will be introduced in Diesel Electrical Multiple Unit and MEMU trains with journey time of more than two hours.
The budget also proposed opening of 1,000 new passenger reservation locations and expansion of unreserved ticketing system from 5,000 to 8,000 locations. Automated ticket-vending machines will be installed at 200 large and medium-sized stations.
In freight and parcel business, the minister said premium service for container movement with assured transit time was being considered. Private ownership of special purpose rolling stock for commodities and private operation of freight terminals will be encouraged.
Mega logistic hubs are being planned along side eastern and western dedicated freight corridors.
Under the 'Kisan Vision Project', special trains will be run from production clusters to consumer centres for perishable products like fruits and vegetables and also for village handicrafts to increase outreach and access to new markets for rural produce.
Temperature-controlled cargo centres will be encouraged and premium parcel services named 'Faster Parcel Services' on pilot basis on three routes -- Delhi-Chennai, Delhi-Mumbai and Delhi-Howrah, will be introduced with guaranteed time transit.
“While the above measures have no immediate benefits for container rail operators, if the assured transit times and permission for access to private sidings are given, it will enable container operators to improve their turnaround times, thereby improving profitability for all the container rail operators,” said IDFC in a report.
The container operators will be encouraged to set up freight terminals and logistics park, which will enable operators to consolidate cargo for their rail operations, IDFC added.
The railway minister also proposed introduction of "Only Ladies" EMU trains in Delhi, Chennai and Kolkata suburban during office rush hours and 'Yuva' trains which will be new low-cost air-conditioned seated accommodation trains dedicated to youth and low-income groups.
They will run from rural hinterland to major cities and metros on fares ranging from Rs299 upto 1,500 kms to Rs399 upto 2,500 kms. Weekly service on pilot basis will be introduced within three months between Mumbai-Delhi and Delhi-Kolkata.
While the concessional monthly season ticket pass for the unorganised sector has been named 'Izzat' (dignity), the 12 non-stop point-to-point train services have been named 'duranto' (quick).
Promising inclusive growth and expansion of rail network to reach development to every corner, Banerjee said the "so-called economically unviable but socially desired projects" will be viewed with social perspective to benefit backward areas and the underprivileged.
An expert committee to advise her is being set up for suggesting innovative financing and implementation of such projects.
She said priority will be given to effect perceptible improvement in cleanliness, quality of railway catering, safety and security and punctuality.
Taking ticketing to 'ma maati manush' (mother, land and people), Banerjee said issue of computerised tickets at post offices and mobile ticketing service vans was being considered.
As a measure of enhancing safety and security, she said there will be timely track renewal, modernisation of signals and use of digital ultrasonic flaw detectors. Integrated security scheme will be introduced in 140 vulnerable and sensitive railway stations and women RPF squads will be deployed for security of women passengers.
Commenting on the rail budget, Gaurav Dua, head-research, Sharekhan Ltd said: “The Railway Budget is more reformist than populist. Rather than the giveaways in form of lower passenger tariffs, the focus is on productive utilization of spare land and develop infrastructure railway infrastructure under the public private participation model. No increase in freight tariffs is also positive for many core sectors like steel and cement.”
Highlights of Railway Budget 2009-10   
  • No increase in passenger fare and freight tariff
  • Budget to have inclusive growth and expansion of railway network to every corner of the country
  • Plan outlay of Rs407.5 billion proposed for 2009-10
  • Passenger amenities get high priority, to get 119% increase
  • Traffic receipts during 2008-09 increase by 11.4 % while freight loading grew of 5%
  • Special trains for perishable farm produce, facilities for transportation of rural craft
  • Works for 7 new lines, gauge conversion of 17 lines and doubling of 13 lines to be taken up
  • Faster parcel services proposed on three routs
  • Tatkal scheme to be made passenger friendly
  • Railway tickets to be made available through post offices and ‘Mushkil Aasaan’ mobile vans
  • Concession for press persons increased to 50%
  • Monthly ticket of Rs25 for unorganized sector/poor under ‘Izzat’ scheme
  • Only Ladies EMU trains at Delhi, Kolkata and Chennai
  • ‘Yuva Trains’ from rural hinterland to metros at concessional fare
  • 12 new point-to-point ‘Duranto’ trains
  • 57 new trains, extension of 27 trains and increase in frequency of 13 trains and air-conditioned double-decker trains proposed
  • 50 stations to be upgraded to world class stations
  • Long distance trains to have on-board doctors and infotainment services
  • Handicapped and aged persons to have more amenities
  • Special trains to ferry perishable agro products and rural handicrafts
  • Special fund for the development of north east railway
  • Quazigund-Anantnag line to be completed by next month
  • 6,560 railway staff quarters to be constructed and group ‘D’ employees to get scholarships for their girl child
  • Railways to come out with while paper on financial status and vision-2020 document
How rupee comes and goes
Sixtyfive paise of every rupee Indian Railways earned in 2007-08 came from transporting goods and just 27 paise from ferrying passengers, but the world's largest railway under a single management spent just three paise on development.
The country's largest employer, with over 1.4 million workers, spent 25 paise of each rupee on wages and other allowances to staff and 11 paise towards pension liability.
Of each Rupee earned by the Railway, 17 paise was spent on fuel, while capital fund accounted for 15 paise. Other major expenditure included miscellaneous expenditure of eight paise, depreciation reserve fund and dividend seven paise each and stores four paise.Lowest expenditure of just three paise was earmarked towards development fund.
On the income side, Railways earned as much as 92 paise of every Rupee from passenger fare and goods traffic. Of this, as much as 65 paise of each rupee came from goods traffic, followed by 27 paise from passenger earnings during 2007-08, the Railway Minister said in Lok Sabha.
Indian Railways also earned four paise from sundry other earnings, while miscellaneous receipt and other coach earnings contributed two paise each to every Rupee earned.

-- Sucheta Dalal