The Hindu Business Line : Chambers' reaction mixed

LEADING chambers of commerce and industry today had a mixed opinion about this year's rail budget proposal. While a few termed it as people and industry-friendly, others called it populist which cannot meet the long-term needs of the economy.

In his reaction, Mr Ashok Soota, President, Confederation of Indian Industry (CII), said, "The Railway Minister has taken a number of positive and visionary steps focussing on safety and rationalisation of the freight structure, further re-classification of freight categories, introduction of new trains, increase in frequency of trains, involvement of the private sector in cleanliness and sanitation. These measures would go a long way in ensuring safety, increase confidence and enhance competitiveness of the railways in the overall transport sector"

Similarly, Dr A.C. Muthiah, President, Federation of Indian Chambers of Commerce and Industry (FICCI), pointed out that some of the welcome features of the Rail Budget are incentives in freight for large volumes of traffic, concessions for even short haul traffic booked for up to 90 km, rationalisation of traffic classification from 32 to 27, reduction in `to-pay' surcharge and rationalisation of the freight rates for the highest and lowest class.

"With features such as no freight or fare hikes, concessions and rationalisations offered to goods and passengers, introduction of off-peak season rates for passengers and concession bulk committed freight, the Railways has metamorphosed from a supposedly monolithic organisation to a market-friendly one," said Dr Muthiah.

Mr Vinod Chandiok, President, Indo-American Chamber of Commerce, said, "The Railway Minister has taken these steps at a time when the Railways are losing the traffic to the road transport, which has proved to be faster and cost-effective."

Mr R.K. Somany, President, Associated Chambers of Commerce and Industry (Assocham), has described the proposals as `populist' and a `missed opportunity' for improving railway finances by removing the cross-subsidisation on account of high freight rates and low passenger fares.

Mr P.K. Jain, President PHD Chamber of Commerce and Industry (PHDCCI), said that given the fact that the railways are the only high capacity transport mode that can meet the long-term needs of our large economy, the Railway Budget has not done much to rise above the short-term focus in its investment initiatives. "Strategic measures to bypass the phase of historic railway decline and entry into a renewed growth phase are missing," said Mr Jain

He said that although an attempt has been made to rationalise the freight structure by reducing the band of freight rates and by reducing the classification of certain commodities where the Railways are facing stiff competition, these measures might not be adequate to divert additional goods traffic to railways.

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