The Hindu Business Line : Is Mamata plan more realistic than Lalu’s?

This is clear from her projections of resource mobilisation through the public private partnership (PPP) route. In his Interim Rail Budget for 2009-10, presented on February 13, Mr Lalu Prasad had envisaged investment of Rs 3,400 crore via the PPP route to fund an overall Plan size of Rs 37,905 crore.

In contrast, Ms Banerjee has provided just Rs 100 crore under this head, while noting that anything beyond this “would just not materialise.” Yet, she has set an overall Plan target of Rs 40,745 crore — Rs 2,840 crore more than the Interim Budget figure.

To finance the higher Plan size, Ms Banerjee is looking at market borrowings (Rs 9,170 crore) and Exchequer support (Rs 15,800 crore), which are pegged above the corresponding Interim Budget provisions of Rs 7,190 crore and Rs 10,800 crore respectively. These two tried-and-trusted sources will fund more than 60 per cent of the budgeted Plan of Rs 40,745 crore.

The ‘realistic’ approach of Ms Banerjee is apparently the outcome of the realisation that the economic slowdown has hit the Indian Railways’ (IR) finances much more than what was anticipated even a few months ago. At the time when the Interim Budget was presented, the IR’s total freight loading for 2008-09 was placed at 850 million tonnes (mt), with goods revenues at Rs 54,293 crore according to the Revised Estimates (RE).

But the ‘actual’ figures now available show last fiscal’s loading at only 833 mt and goods revenues falling short of the RE by Rs 860 crore. The IR’s ‘actual’ gross traffic receipts in 2008-09, at Rs 79,862 crore, fell short of the RE of Rs 82,393 crore by over Rs 2,500 crore.

It is in this light that Ms Banerjee has chosen to be more conservative on revenue projections. Mr Lalu Prasad’s Interim Budget assumed a freight loading of 910 mt for 2009-10, with goods revenues of Rs 59,059 crore and gross traffic receipts of Rs 93,159 crore. Ms Banerjee has pared these down to 882 mt, Rs 58,525 crore and Rs 88,419 crore, respectively.

“I have now set more realistic targets for 2009-10 based on the continuing trend of recession in the manufacturing sector and exports,” the Railway Minister said in her Budget speech

The investible surplus available after dividend and all other appropriations is also pegged much lower, at Rs 8,631.04 crore, against Mr Lalu Prasad’s more ambitious Rs 13,532.33 crore. , But despite this Rs 4,900 crore-plus lower projection in internal resources, Ms Banerjee has managed to target a bigger investment plan on the back of enhanced Budget support and higher market borrowings.

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