New Delhi: With
passenger fares on a freeze for years and little money to expand
the world's second largest railroad network under a single
management, Minister Dinesh Trivedi has an unenviable task when he
presents the annual Railway Budget March 14.
Poor financial management over the past few years has left Indian
Railways staring at an earnings shortfall of Rs.7,000 crore
despite gross budgetary support of Rs.20,000 crore last year and a
Rs.3,000-crore loan approved by the finance ministry Feb 6.
"Revision of passenger fares is long overdue. The railways need to
invest in additional lines and build more rakes," former Railway
Board chairman R.K. Singh told IANS even as experts said populist
measures of the Trinamool Congress have held the railways hostage.
As per estimates, a 25 percent fare hike can generate Rs.12,500
crore and is crucial to Indian Railways that runs 10,500 trains
and ferries 22 million passengers daily over 114,000 track km. The
fares were last hiked in 2002-03.
"It is an unprecedented situation," a senior railway official
commented on condition of anonymity while describing the financial
crisis, adding that it will certainly not help since Trivedi
belongs to the Trinamool Congress, which is opposed to any fare
With 19 members in the Lok Sabha, the lower house of parliament,
the Trinamool Congress is a crucial ally of the United Progressive
Alliance (UPA) government of Prime Minister Manmohan Singh and has
often shelved key reforms such as foreign equity in retail.
The last fare rationalisation exercise was in 2002-03, when the
minimum fare for second class mail and express trains was hiked by
Rs.1 from Rs.15 to Rs 16. For long distance trains, up to 341 km,
the hike ranged from Rs.1 to Rs.6.
As a result of the moderate nature of the hike, as opposed to a
more realistic exercise, the operating ratio now stands at 100
percent, up from 75 percent in 2008-09. This means every rupee
generated is spent on running the network, with no room for
"All big projects are at a stand-still. The railways are unable to
maximise earnings," said Singh, adding there is no money left to
address crucial areas like the renewal and replacement of existing
assets and taking up further development projects.
For the record, the working expenditure of railways, which was
Rs.73,000 crore in 2010-11, is likely to shoot by over Rs.6,000
crore during this financial year, ministry sources said .
This, together with a carryover of Rs.2,000 crore shortfall in the
earnings in 2011-12, is expected to dent the internal
resource-generation exercise by Rs.8,000 crore during this fiscal,
Several representations have been made to revise passenger fares
since this is seen as the only way. Those in favour include the
Parliamentary Railway Convention Committee, the Planning
Commission and even trade unions within the establishment.
Will Trinamool Congress chief and West Bengal Chief Minister
Mamata Banerjee -- herself the railway minister till last year --
permit such as move? An answer to this will come only March 14
when her party colleague Trivedi presents his maiden Railway
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