What track will Congress’ Bansal take today?

Our Bureau New Delhi | Updated on March 12, 2018

Final touches: Railway Minister Pawan Kumar Bansal and Chairman of the Railway Board Vinay Mittal finalising the Railway Budget in the Capital on Monday. — Kamal Narang

Bansal is understood to have discussed the possibility of a fare hike with Congress president Sonia Gandhi.

For most of the United Progressive Alliance’s nine-year run, the coalition leader Congress ceded the Railway portfolio to one of its partners — first to the Rashtriya Janata Dal and then to the Trinamool Congress.

Now it has its own man in the Rail Bhavan. So what track will the Congress take tomorrow, when the country’s 40th Railway Minister Pawan Kumar Bansal presents the Budget for the monolith?.

For Bansal, the key challenge will be to drive revenue growth in the next fiscal when the economy is slowing. But the one advantage Bansal has is unlike his predecessors, he will present the Budget when the Railways is on a financially sound track.


Bucking the slowdown, the Railways logged a 20 per cent growth in its total revenues this year, the highest ever in the last decade.

But this has been largely due to a steep across-the-board freight rate hike just a few days before the last Railway Budget was presented.

So, this year till date, despite a below five per cent growth in actual freight loading, revenues from goods, which account for two-thirds of the Railways total revenues, are up 25 per cent over last year.

This means, Bansal has limited legroom to hike freight rates any further. .

So, will he hike fares, again, as he did last month? He had termed the January fare hike as “modest” and the move did not attract serious political flak.

While announcing the fare hike, Bansal had categorically stated that fares will not be raised in the Budget.

But he may change his mind as the subsequent diesel price hike has shaved almost 40 per cent of its extra earnings from the January fare hike. Despite passenger fares being a political hot potato, Railway officials favour a hike to compensate for the higher diesel cost.

After all, had they gone up in sync with inflation of about 7-8 per cent every year since the beginning of UPA-I regime, passenger fares would have doubled by now, top Railway officials argued.


For 2013-14, Bansal will have also to raise more from extra budgetary resources and market borrowings.

This may be through participative models for last-mile connectivity, automobile freight train operator policy, station modernisation, modernisation of base kitchens and catering units to be taken on public-private participation basis .

Updates on Jammu and Kashmir projects, steps to improve cleanliness, dedicated freight corridor, rail tariff regulator, clean toilets, use of IT to improve safety and security, new trains and stoppages and more electrification, may also find a place in the Budget.

The Railways has also been discussing a move to link the Mahatma Gandhi National Rural Employment Guarantee Act scheme with rail-related construction work.


But will Bansal implement the biggies?

He has before him proposals on automatic fuel cost pass through, more dynamic pricing, and a fresh safety surcharge after the previous Special Railway Safety Fund (SRSF) lapsed about four years ago.

Since Lalu Prasad legalised over-loading of cargo on trains when he was the Rail Minister under UPA-1, Railway tracks have taken considerable battering. While freight earnings did go up, they came at the cost of damaging tracks and may create safety issues.

In this context, many high-power committees have recommended levying a dedicated surcharge on fares and freight, the revenues to be earmarked for safety-related projects.

A dedicated surcharge also depoliticises the Railways’ investment decisions to some extent.

Earlier initiative

An exercise to this effect was actually undertaken by the BJP-led National Democratic Alliance in 2001 through the creation of a five-year, non-lapsable SRSF.

Although proposed by the then Railway Minister and current Chief Minister of Bihar, Nitish Kumar, Lalu Prasad did not roll back what was effectively a fare increase initiative of his political opponent.

In fact, in his Budgets, Lalu Prasad kept referring to the various works done through the funds that the SRSF had helped mobilise.


Published on February 25, 2013

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