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Will Mamata Pull the Chain on Ambitious Railway Budget ?

March 15, 2012

The Railway Budget has adequately addressed the ongoing financial woes with revenue-enhancing measures. The passenger fare hikes come on the back of freight rate hikes on March 6, 2012. The rail budget can be considered non-populist and is a reflection of the intensely tight fiscal conditions facing the governments in general and is reflected in the fact that the passenger fare hike (10% to 12%) has happened after a long gap of 8 years.

Rail budget sets ambitious targets for FY13 (revenue) and 4x increase in capital outlay 12th five year plan to Rs7350bn. Aims to achieve sharp improvement in operating ratio.

Budget a definite positive due to passenger fare hikes
The budget provided for an increase in passenger fares ranging from Rs0.03/km for mail and express second class to Rs0.3/km for AC first class and expects to see a passenger traffic growth of 5.4% and an overall passenger revenues growth of ~25% in FY2013 over the last year. The following Chart Shows the Proposed Railway Fare Hike for Sleeper Class, AC 3 / 2 Tier and AC First Class.

Other Key Takeaways

  • Rail coach factories are proposed to be set up at Odisha, Kerala, Gujarat, Karnataka and West Bengal.
  • A team of experts to be set up to consider the Pitroda Committee recommendations for modernization.
  • To set up Rail-road Grade Separation Committee to eliminate level crossings, Indian Railway Station Development to redevelop stations, Logistics Corporation for management of railway logistics and National High Speed Rail Authority.
  • A tariff regulation authority is likely to be set up after discussions with the stakeholders concerned
  • Logistics Corporation to be set up for development & management of existing railway goods sheds and multi-modal logistics parks
  • PPP to be encouraged – Wagon leasing, Sidings, Private Freight Terminals, Container train operations, Rail connectivity projects to be made more attractive to PPP partners

Big Question Mamata Banerjee the leader of the TMC has made the Railway Minister, Dinesh Trivedi resign and installed a puppet Mukul Roy to show off that she is still the Queen in Delhi Politics. So will the proposed 1.3 Lakh Crore Railway Budget sail through ? Like we have been saying for the past 10 months, Politics is Destroying Indian Economic Growth.

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