Railway Budget: Passengers breathe easy - Views on News from Equitymaster

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Railway Budget: Passengers breathe easy

Feb 26, 2001

In her second consecutive railway budget Railway Minister Ms Mamta Banerjee has walked a fine line between political compulsions and raising revenues for the ailing Indian Railways. The Minister exempted all classes of passenger fare from any hike. But she slapped a 3% increase on the freight rates of all non-essential commodities in a bid to mop up Rs 5 bn annually. However, essential commodities like edible oil, grains, sugar, salt, kerosene, LPG, fruits, vegetables, grains and pulses were exempted from this 3% hike. Parcels, luggage, newspapers, magazines and medicines were also exempted from the levy.

Added to this, the railway minister also levied a 2% hike on freight rates of coal and 1% on furnace oil. The changes in rates would be effective from April 1.

The budget has significantly stepped up the annual plan outlay for the coming year to Rs 111 bn, up 11% over last years outlay, without any increase in budgetary support.

Capital support from the exchequer will continue to be Rs 35.4 bn, as in the current year. Railways will go in for market borrowings to the extent of Rs 40 bn. The balance Rs 35.5 bn will be met through internal accruals.

The budget has fixed the freight target at 500 m tonnes for FY02, a 25 m tonne increase over the current year. Ms Banerjee projected a 9% growth in passenger traffic.

The minister retained the sops she gave in her earlier budget. These include concessional season ticket for people below poverty line. She extended the relief available to people suffering from orthopedic handicaps and paraplegic persons currently, to the visually and mentally handicapped.

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