Except for the fact that it was after 17 long years that a Congress minister got to present the Railway budget, there was nothing particularly unique about Pawan Kumar Bansal’s maiden essay. Having raised fares a little over a month ago, he was able to spare passengers this time, but he has put in place a dynamic tariff mechanism for freight to take care of future increases in the price of fuel. This is likely to result in a 5 per cent rise in freight rates from April 1, with the promise of a half-yearly fuel price adjustment system to provide for the regular hike in diesel prices announced earlier by the government. The January 22 passenger fare revision was meant to fetch the Indian Railways Rs. 6,600 crore in additional revenue in a full year; but the recent increase in diesel prices could cost the Railways Rs. 3,300 crore in its fuel bill. The logic of dynamic tariffs, even if only for freight, can therefore hardly be faulted. On the passenger fare front, though the basic fare has not increased, the minister has raised the reservation, tatkal, supplementary, cancellation and super fast train charges marginally. With the focus on making the Railways “financially sustainable,” Mr. Bansal is hoping to end 2013-14 with a balance of Rs. 12,506 crore in Railway funds.
A major achievement of the Railways in what has otherwise been a lacklustre year is the significant improvement in its Operating Ratio, i.e. total expenses as a percentage of revenue. Currently at 88.8 per cent, it has now been projected to reach 87.8 per cent in the coming year. Because of the slowdown in the economy last year, the Railways’ annual plan as well as freight loading target had to be scaled down. Against an estimated Rs. 60,100 crore plan for the current year, the Railways pruned it to just over Rs. 52,000 crore. This has been raised to Rs. 63,363 crore for the coming year and the challenge lies in achieving that. The focus of the plan seems to be on doubling of tracks, raising capacity, improving safety and significantly enhancing passenger amenities on trains and at stations. Internet ticket booking hours have been extended to allow customers to make reservations 23 hours a day. Like his predecessors, Mr. Bansal could not resist the temptation of announcing a string of new manufacturing units, 67 new express and 27 new passenger trains, in addition to a host of new lines and surveys. Of course, many if not most of these have gone to select constituencies important to the Congress party, and to electorally important States such as Uttar Pradesh, Haryana, Karnataka, and Andhra Pradesh. With general elections due in 2014, Mr. Bansal has used the budgetary means at his disposal to signal the onset of campaign season.