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Rail Budget: 10 expectations from Dinesh Trivedi


New Delhi:

Railway Minister Dinesh Trivedi is not only a trained pilot but also an articulate, suave and widely travelled politician who has, for long, been Trinamool Congress chief Mamata Banerjee's point man in New Delhi. He will present his first Rail Budget on Wednesday.

Here are 10 expectations form Trivedi's budget speech:

1) Political budget: The seven north-eastern states, which hold the key for Trinamool Congress to emerge as a national party, could be bestowed with a slew of new rail projects in the upcoming Rail Budget. Last year, the then Railway Minister Mamata Banerjee had announced measures to connect the seven capitals of N-E region to the rail network, on which Trivedi is expected to propose steps to expedite the mission.

2) Passenger fares have not been hiked for nine year in a row and they are unlikely to be raised this year too. The Railways cross-subsidises passenger fares with higher freight charges and earns only Rs 30,000 crore from passenger fares.

3) Freight rates also unlikely to go up: The ministry has already hiked freight fares twice in the last four months. On 6 March, the ministry raised freight rates by 20-32%. The Railways will benefit by Rs 15,000 crore because of the freight hikes. It earns nearly Rs 70,000 crore from freight fares.

4) Financials: Trivedi is likely to focus on revenue generation because the Railways operating ratio (the amount of money spent for every rupee earned) has been rising to alarming levels. It rose from 75.9% in 2008-09 to 92.3% in 2010-11. Railways had sought Rs 50,000 crore from Finance Ministry as gross budgetary support (GBS) but they are likely to get only Rs 25,000 crore for the next fiscal from the central kitty. Given the financial condition of Railways, Trivedi's first Rail Budget is also likely to seek a two-year moratorium on paying dividend to the government.

5) Safety: A blue print for upgrading signalling and telecommunication system to prevent accidents is expected despite financial constraints. The multi-crore action plan for upgradation of the system is slated to cover the 19,000 km long major trunk route such as New Delhi-Mumbai, New Delhi-Kolkata and New Delhi Delhi-Chennai corridors.

6) Infrastructure: Extension of railway lines in excess of 1,300 km expected. Analysts say Railways need to move faster on this. In 1947, India had nearly 54,000 km of rail tract and after over 60 years we have only 65,000 km track.

6) New manufacturing units: The Rail Budget may have proposals for state-of-the-art coach manufacturing units in Karnataka and Gujarat. The minister may announce the acquisition of 20,000 wagons this year against 18,000 wagons last year.

7) New trains: Trivedi is also likely to announce a new bullet train corridor for Rajasthan. The 591-km Delhi-Jaipur-Ajmer-Jodhpur route is slated to be taken up for pre-feasibility study for introducing bullet trains, which run at a speed of 350 km per hour, and an announcement to this effect is likely to be made on March 14. Trivedi could also announce a proposal for induction of train sets, which run at 200 km per hour, on the Delhi-Mumbai route. A train set consists of a high horse power electronic locomotive with about 10 modern coaches and is estimated to cost Rs 200 crore.

8) Dedicated freight corridor: Expectations of two tenders to be floated this year. The dedicated freight corridor is slated for completion by March 2017. The Western Corridor from Dadri in Uttar Pradesh to Jawaharlal Nehru Port Trust near Mumbai measuring 1499 km will connect Haryana, Rajasthan, Gujarat and Maharashtra. A major portion of the corridor will be financed through Japanese assistance. The 1839-km-long Eastern Corridor from Ludhiana to Dankuni in West Bengal will connect Punjab, Uttar Pradesh, Bihar and West Bengal. The World Bank will provide assistance for a part of this passageway, while the Sonnagar-Dankuni section will be funded through PPP.

9) Railway stocks closed lower in trade today. But most companies expect higher plan outlay in this year’s Rail Budget. Shares of Texmaco Rail, which is the largest wagon maker in the country, gained 1.7% on the Bombay Stock Exchange. Kernex Microsystems that manufactures collision provision gained 0.4%. Heavy equipment major Bharat Earth Movers Ltd (BEML) was down 1% while another railway equipment manufacturer Kalindi Rail Nirman witnessed sharp selloff, falling over 2%.

10) Green initiatives: A proposal for manufacturing as many as 25,000 environmental-friendly toilets could be included in the budget.

((With PTI inputs))

Story first published on: March 14, 2012 07:00 (IST)




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