Kharge refrains from populism, leaves fares, freight rates untouched

Our Bureau Updated - March 13, 2018 at 10:42 AM.

No new projects announced; passenger revenues drag performance

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Moving away from the usual formula of announcing populist measures, Railway Minister Mallikarjun Kharge refrained from reducing passenger fares or announcing new projects in his interim budget 2014-15, presented in Parliament on Wednesday.

This at a time when the Railways’ revenues are under strain, primarily because of lower passenger earnings and higher costs.

As expected, Kharge’s speech focussed on highlighting the achievements of the Railways during the five years of UPA-II.

Passenger earnings are expected to fall short of the budgeted target by ₹4,710 crore during the current fiscal.

Interestingly, the lower-than-expected earnings — ₹37,500 crore as opposed to the budgeted ₹42,210 crore — were entirely on account of the non-AC segment travellers. The Railways’ revenue from the second-class segment is estimated at only ₹26,324 crore against the target of ₹32,104 crore. On the other hand, earnings from the AC segment surpassed the budget estimate of ₹10,105.53 crore by ₹1,070 crore.

Railway officials attribute this to the economic slowdown, which has, among other things, cut movement of people from rural areas to industrial and urban centres. The increase in fares — in January 2013, the Rail Budget in February, and another round in October — also seem to have played a part.

Revenues from the less price-sensitive AC segment were not affected; it is quite possible that the Railways even attracted traffic from those normally travelling by airlines due to fare volatility in the latter especially during peak season.

While passenger earnings have on the whole suffered, Indian Railways, however, is projected to post revenues of ₹94,000 crore from freight, ₹446 crore more than what was budgeted. Kharge said that the original target of loading 1,047 million tonnes for the current fiscal is set to be exceeded by five million tonnes.

This again is ironically being attributed to the slowdown. The slowdown, in combination with diesel price hikes and high interest rates, has hit truck operators hard. This, to some extent, has benefited the Railways. Besides, the Railways moved more coal, the mainstay of its freight traffic, this year.

Setting the agenda for the future, Kharge said that the Railways will have to become a financially self-sustaining entity.

Tariff authority The setting up of an independent Railway Tariff Authority to depoliticise the fixing of passenger and freight charges, expanding the scope of dynamic pricing, linking passenger fares to fuel prices, speeding up the award of contracts for implementing the dedicated freight corridor project, and exploring options for raising train speeds to 160-200 kmph even on existing select routes, were the focus areas identified by Kharge.

A disappointing part has been the Railways falling short of meeting its annual plan investment target of ₹63,363 crore by over ₹4,000 crore. This was due to lower revenues and higher-than-budgeted expenses on fuel (₹2,100 crore), pension (₹1,700 crore) and other staff costs.

17 new premium trains, 38 express trains and 10 passenger trains ( >Full list ).

>Mallikarjun Kharge's interim Railway Budget speech full text (click here for >Hindi version)

>Highlights of the interim Railway Budget 2014 (click here for >Hindi version)

Published on February 12, 2014 07:40