RAILWAY BUDGET 2007

COURTESY: MSN INDIA - BUSINESS
Rail Budget 2007 - Passenger fares cut

Monday, February 26, 2007

Highlights of Railway Budget 2007-08

New Delhi: Following are the highlights of the Railway Budget 2007-08, presented in Lok Sabha today by Railway Minister Lalu Prasad.

* No increase in passenger fares for any class of travel
* No across-the-board increase in freight rates
* Freight rationalisation process to continue in 2007-08
* 5 per cent cut in freight rates for diesel, petrol
* 6 per cent reduction in iron ore, lime stone
* 10% surcharge on Iron Ore freight on busy route dropped
* Discounts in fares during Busy and Lean season
* During busy season maximum discount of 4 per cent in AC Chaircar and new sleeper coaches with 84 berths
* During lean season maximum discount is 8 per cent in AC Chaircar and AC 3-Tier with 81 berths
* Busy period will be April 16-July 14 and September 16- January 14
* Lean period to be from January 15 to April 15 and July 15 to September 15.


New Delhi: In yet another populist budget, Railway Minister Lalu Prasad Yadav has cut passenger fares across the board.
The fare for the AC 1st class have been cut by 6% in the lean season and by 3% in the busy season.
Sleeper class fares have been slashed by 4%.

Freight rates on diesel and petrol cut by 5% each and that on iron ore by 6%.
During the year, the cement freight traffic surged 30 per cent as compared to 25 per cent in the same period last fiscal.
Also, 15 private container licences were issued and Railways plans to start operating three storey freight containers.

Tabling his fourth straight rail budget in the light of the recent blasts on the Samjhauta Express, the Minister stated that the Railways made a profit of Rs 20,000 crore in FY'07 without burdening the common man.

The Return on Capital Employed (RoCE) stands at 32 per cent and the interest surplus stands at Rs 10,227 crore.

During April–December 2007, the passenger traffic increased 14 per cent, while the freight traffic registered an increase of 17 per cent in the same period.

Rail infrastructure
The proposals include massive investments for rail infrastructure and container operations. The Budget proposes launching new wagons of 15-25 metric tonnes besides introducing 800 bogies in existing trains.

Railways plans to start operating three storey freight containers. NTPC and other companies will help in construction.

Construction of dedicated freight corridor is expected to start in 2007-08 and envisages an investment of Rs 30,000 crore. Railways will also start 32 new trains and eight Garib Raths this year.

Passenger amenities
The number of berths is proposed to be increased from 72 to 84 in sleeper coaches. Wooden seats to be replaced by cushioned ones in ordinary class passenger trains from next fiscal. The unreserved compartments in new trains will also go up from four to six.

Design changes have also been proposed in design of the compartments to help the physically disabled.

"Mumbai Urban Transport Project is proposed to be speeded up to help suburban commuters," said Yadav adding that a sum of Rs 5,000 crore will be allocated during the next Five-Year Plan for the purpose.

As a measure to ease ticket booking, the Minister proposed setting up of 6,000 automatic ticket vending machines in next two years. Tickets will be sold at petrol pumps, Bank ATM centres etc. Railways will set up 300 new model stations.


Brains behind Lalu`s budget

Monday, February 26, 2007

New Delhi: While Lalu Prasad often walks away with the accolades for turning around the Indian Railways, it is his core team of three - Railway Board Chairman JP Batra, Railway Board Financial Commissioner R Sivadasan and Officer on Special Duty Sudhir Kumar - that burns the midnight oil and helps in giving shape to his vision.

Sivadasan, who was the General Manager of South Central zone before he took over the current assignment, plays the significant role of the chief accountant of the Railway Board. He is the chief architect behind formulating the annual plan of the Indian Railways. He keeps a tab on the market borrowings, internal and extra budgetary resources and also the capital support to the annual plan. All these transactions help the financial commissioner in revising the size of the annual plan every year. Sivadasan also advises the railway minister on populist measures (pertaining to new trains or passenger amenities) to be announced in the budget. He cautions about the financial repercussions of any new announcement.

Thus, all announcements are made after thorough discussions between the financial commissioner and the minister. Batra, who heads the Railway Board, plays a supporting role in the entire exercise. An ex-army captain, Batra was the General Manager of the East Central Zone before he was brought to Rail Bhavan.

The preparation of the railway budget being largely a financial exercise, the financial commissioner and the budget cell of the railway board play the main role.

However, as the administrative head of the board, Batra plays a crucial role of communicating with all the members of the board handling areas such as traffic, mechanical, electrical, and engineering. He conducts periodical meetings with all the members and collects important inputs about requirements of various departments.

All these inputs are forwarded to the financial commissioner, who keeps them in mind while preparing the railway budget.
Sudhir Kumar, the officer on special duty (OSD) to the railway minister, has an unconventional role to play in the budget exercise. This is because under Prasad’s regime, it is for the first time that a minister’s OSD has been involved in the entire process.

Kumar being a product of Delhi School of Economics, was specially brought in by Prasad to help the financial commissioner in improving the fiscal health of Indian Railways. All the inputs and opinions collected through the Railway Board chairman are compiled by the OSD, who then presents it to the financial commissioner for consideration.

Along with him, the OSD then tries to inculcate these into the budget document as per the guidelines of the ministry. As the official voice of the railway minister, he tries to include the minister’s personal views also in the railway budget. At the same time, he prunes these demands to suit the finance of the ministry. But by and large, his role remains secondary to the financial commissioner.