Rail Budget 2013: Bansal promises austere measures as losses mount

While presenting the Rail Budget 2013, Railway Minister Pawan Kumar Bansal today not only sought more financial support by highlighting the importance of a financially sustainable Indian Railways, but also hinted at costlier rail fares by pointing out that passenger and freight rates need to help provide for the growth of the railways. Committing to improving the financial health of the Railways, Bansal also highlighted his short-comings. [caption id=“attachment_639893” align=“alignleft” width=“380”] Screen grab from ibnlive[/caption] Even while the the number of passengers has increased from 8,000 in 2001 to over 12,000 in 2012, losses continue to mounting due to scarcity of resources and thin spread of funds, said Bansal.  According to his estimates, losses to the railways on account of passenger traffic are likely to rise to Rs 24,600 crore in 2012-2013 from Rs  22,500 crore in 2011-12. “Losses on passenger services increased from Rs 4955 cr in 2001 to Rs 22500 cr in 2011-12 and it is expected to be Rs 24600 cr in 2012-13.” The Indian Railways had targeted to mop up an additional revenue of Rs 6,600 crore for the current financial year (2012-13), but the fuel price hike wiped out Rs 3,300 crore of it. “Plans are not being funded in a time-bound manner,” he said, adding that “the target for expanding the railway network needs to be higher”. The Railways plans to raise Rs 95,000 crore in the next four years of the 12th Five-Year Plan. While the government’s budgetary support amounted to Rs 1.94 lakh crore, the Railways plans to raise an additional Rs 1 lakh crore through Public Private Partnership. Promising austere measures, he said the operating ratio for the current year is estimated at 88 percent from the current 95 percent. This means that for every Rs 88 spent, he gets Rs 100 back, which is a 12 percent profit.  And even while passenger fare earnings for the current year are lower than expected; net revenue will come down by Rs 6,000 crore, said Bansal. The  Freight income is  expected at Rs 89976 crore for FY14 since freight charges have been hiked by 5 percent effective from April 2013. Expecting a budgetary support of Rs 20,000 crore for 2013-2014, he said Railways will mobile Rs 600 crore via PPP investments and Rs 15,000 crore via market borrowing. But rather than monetising land for commercial development, he allocated Rs 1,000 crore each for railway land development authority and railway station development authority. And even though Bansal did not raise passenger fares, he proposed a fuel charge for freight and an additional charge for super fast trains.