The Hindu Business Line : Railways to get Rs 2,000 cr more from Centre

IN a reprieve to the cash-starved Railways, the Finance Ministry has committed an additional funding of about Rs 2,000 crore as the Centre's support to the Railway Budget for 2004-05, according to Rail Bhawan sources.

The Railways Minister, Mr Laloo Prasad Yadav, had sought additional budgetary support to finance the proposed safety and modernisation measures announced by the United Progressive Alliance (UPA) Government as its "priorities".

The Centre's support to the Railway Plan had been pegged at Rs 4,544 crore in the interim Budget presented earlier this year by the then Railways Minister, Mr Nitish Kumar.

The total Central support pledged was in the region of Rs 7,000 crore, which includes separate allocation for the Rs 15,000-crore National Rail Vikas Yojana, Rs 20,000-crore Remote Area Sampark Yojana and the Rs 6,000-crore Kashmir Rail Link project.

"We understand that the Finance Ministry has agreed in principle to step up the Central support to the Railways. The commitment follows a meeting between Mr Yadav and Mr P. Chidambaram earlier this month," a senior Railway Board official told Business Line.

"The new Government has decided to focus on safety and expansion of the rail network in a major way. Over the years, the support from the general exchequer to the Railways Budget has been falling as a proportion of the total Plan outlay. The imbalance needs to be corrected," the official said.

With the increase, the total support to the Railways is likely to be in the region of Rs 9,000 crore, he said.

Meanwhile, the Railways are looking at the possibility of affecting a 10 per cent hike in upper class passenger fares to mop up additional revenues. The hike is in line with the 10 per cent increase in airfares, which has given the Railways some flexibility to increase upper class fares.

The Railway Board is understood to have recommended a minor increase in sleeper class and second class fares along with a minor impost on the monthly season tickets as even a 10 per cent hike in upper class fares would yield just Rs 300 crore for the Railways. Freight rates are likely to be left untouched

The Minister, however, is in not favour of increasing the lower class fares and instead wants the different zones in the Railways to plug revenue leakages due to ticket-less travel.