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Chambers hail innovative steps

Our Bureau

NEW DELHI, Feb. 25

THE apex chambers of commerce and industry have welcomed the Railway Budget, which was presented here today by the Railway Minister, Ms. Mamata Banerjee. They have complimented the Minister for launching a development-oriented Budget.

Welcoming the provisions of the Railway Budget, the President of the Federation of Indian Chambers of Commerce and Industry (FICCI), Mr. G.P. Goenka, said the Minister has taken utmost care to minimise the burden on the common man by not increasing the p assenger fares and has resorted to only moderately increasing the freight charges. ``However, care has to be taken that the freight increase across-the-board barring certain essential commodities, does not result in cost-push inflation,'' Mr. Goenka sai d.

The FICCI President said the Railways' operations should be increasingly commercialised and it should strive to achieve higher freight loading target.

He further said that to increase efficiency and make the Railways more competitive, it is important to focus on accelerating the process of wagon acquisition, greater degree of electrification and conversion of railway track and focus on a computerisatio n programme.

However, an area which has not been spelt out is relating to the rationalisation, retraining and redeployment of the workforce with Railways which is a major cause of concern. Clear-cut policy measures, such as creation of safety net and large-scale trai ning facilities are needed to convert the Railways into a vibrant and dynamic system.

``It is important to step up the process of private sector participation so that there would be an overall improvement in efficiency,'' Mr. Goenka said.

While complimenting the Minister, the President of CII, Mr. Rahul Bajaj, said that looking at the precarious finances of the Indian Railways it is, indeed, bold on the part of the Minister to have announced an annual Plan of Rs. 11,000 crores, higher by 23 per cent compared to the previous year. He further welcomed the increase in budgetary support of Rs. 3,540 crores to Railways - a 40 per cent hike as compared to the previous year.

Appreciating the announcement of streamlining the procurement procedures, particularly the introduction of a complete procurement calendar, CII stated that it would bring in transparency and help streamline the system of internal audit for better monitor ing and accountability. CII added that this would also help the private sector to plan their production and capacity additions.

CII particularly applauded the various measures initiated by the Railways to augment resources through non-traditional sources, particularly the commercial utilisation of air and land space, including the right of way to build nationwide broadband teleco m and multimedia network by laying optic fibre cable.

However, CII voiced disappointment while noting that the Railways would continue to cross-subsidise the passenger fare, which has been left untouched. The general fare increase of five per cent on all commodities, except some essential ones, would impose a cascading burden on the general price level and the economy.

Welcoming the Budget for introduction of some innovative measures, the Associated Chambers of Commerce and Industry of India (Assocham), feels that the Railway Minister has, however, missed the opportunity of carrying out fundamental reforms and rational isation of tariff structure.

The Chamber has welcomed the steps announced by the Minister to raise resources through non-traditional sources. However, it has expressed concern over the five per cent increase in freight rate in the face of falling freight movement in the railway netw ork. This will raise the production cost of industrial goods. ``At a time when most of the companies are experiencing low profit margins, it may be difficult for them to absorb the hike in input costs,'' the chamber has said.

Further, Assocham has said that in the globalised scenario, this will be detrimental to Indian industry as domestic products will become less competitive in the international market. ``The silver lining is the promise of lower freight for bulk goods like coal, iron ore, iron and steel and fertilisers, among others.''

In a statement, the President of the PHD Chamber of Commerce, Mr. K.S. Mehta, has said that the hike in freight rates up to seven per cent would lead to similar increase by road transporters and was against the Railway Minister's intention to attract 10 per cent of the goods traffic to the Railways from roads in the coming years.

Viewed against the backdrop that there has been steady decline in the share of Railways in the freight movement from a peak of 89 per cent in 1950-51 to 40 per cent now, it is heartening that the Minister has set the target of achieving 50 per cent of th e freight movement, FICCI opined.

The freight loading target of 450 million tonnes is in the achievable realm although freight earnings are likely to fall short of the target of Rs. 250 crores due to drop in lead time and change in commodity mix. It is the challenge of the Railways to re duce the lead time and attract high value freight so that the earnings from freight operations increase.

Mr. Goenka said that the Railway Minister rightly has assigned areas of private sector participation in setting up model stations and also for running luxury trains such as the `Palace on Wheels'.

The major thrust on new lines, track renewals, doubling and augmentation of traffic facilities, signal and telecommunication besides replacement and acquisition of rolling stock is laudable while a few Plan allocations may be inadequate from the commerci al point of view, FICCI said.