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Lalu all set to put his budget on populist track

There are firm indications passenger fares will not be touched while cheaper AC trains may be put on tracks when he presents his third rail budget.

india Updated: Feb 23, 2006 19:41 IST

With the Railways' coffers bulging with a Rs 10,000 crore surplus income, an emboldened Railway Minister Lalu Prasad is all set to present his third Budget in the Lok Sabha at noon on Friday.

There are firm indications that passenger fares will not be touched while cheaper AC trains-- Jan Sadharan Express-- may be put on tracks and the revenue-generating freight segment streamlined through announcement of dedicated freight corridors.

Populist measures

Review of timetable for reducing journey time, converting 400 Mail and Express trains into super fast ones, running all popular trains with 24 coaches from the existing 18 and improving occupancy of trains by another 5 per cent through passenger profile management are also high on the minister's agenda.

Yet,Lalu will have to grapple with a rider which is ostensibly to discourage populist schemes in the name of development because modernisation of tracks, bridges, signalling equipment and telecommunications are the most pressing problems of the transport behemoth and country's biggest public sector enterprise.

"I have no plans of hiking passenger fares. I will turn the Railways around without increasing fares in any category," says the minister. This is a good way of countering the competition from low-cost airlines.

Cheaper AC trains to compete with cheaper airlines

Passenger demand is not a problem for the Railways, which carried 550 crore passengers in 2004-05. The threat comes from a possible loss of AC class passengers who are being tempted to travel by no-frills airlines.

Introduced on January 26 in two Rajdhani trains, the automatic seat upgradation scheme, under which waitlisted passengers are transferred to vacant seats in the next higher class through computerised random selection, has since been extended to cover all Rajdhanis and 15 other important trains.

In the Budget, the minister may extend the scheme to all 1500 trains to boost revenues and attract potential air travellers. The Railways is likely to earn a revenue of Rs 1-1.5 crore per day and about Rs 500 crore a year, besides two per cent improvement in occupancy in AC coaches.

Frequent Traveller Scheme

The February 20 launch of 'Frequent Traveller Scheme', a joint initiative of the Railways and the SBI Card, is also an attempt in that direction. It will facilitate the rail passengers, travelling frequently in AC1 and AC2 classes, get bonus points for their journeys. "Don't be surprised if there is a slight reduction in AC1 and AC2 fares," ministry officials say.

Unlike the Re 1 reduction in second class non-reserved ticket last year, a tokenism that cost the Railways Rs 250 crore, this time fares will be restructured as a profound business strategy. "A vacant seat is a lost seat. I will like my Ministry to 'play on volumes', getting more people to use the Railways because full capacity trains would ensure a sharp increase in revenues," says Lalu Yadav.

In the pervious budget, the minister had announced Sampark Kranti Express trains connecting state capitals with New Delhi. This year's budget may see introduction of Jan Sadharan Express -- cheaper AC trains which will connect metros and big cities and provide air-conditioned travel to common man at an affordable fare.

These will take the load off Shatabdis and Rajdhanis.

Longer trains to boost capacity

To boost capacity, the minister says, trains would be longer. "Express trains in India have 18 coaches on an average. The Railways is thinking of pushing that up to anything between 22 and 24, depending on the demand. This will be done initially for trains that have waiting lists of over a hundred passengers,"LaluYadavsaid.

The Budget may implement the Passenger Profile Management Scheme under which a bogie can be added or deleted from trains depending upon the demand of passenger traffic.

Further, the ministry is likely to invest in platforms. This year Rs 300-400 crore will be spent to extend platforms and raise their heights across the country.

Faster trains to reduce journey time

There are also plans to ensure fast movement of the trains. Super fast trains run at 55 km per hour on an average; the Rajdhanis run at nearly 80-90 km per hour. "The proposal is to get these moving as close as possible to 130 km per hour, the maximum permissible limit on Indian rail tracks," the officials point out.

On the freight side, which accounts for two-thirds of the Railways' income, the budget may witness a fall in its rates.

Freight rates may go down

Railways is considered to be the cheapest mode of transportation for carrying loads for distances over 500 km. Reduction in freight rates will make it more attractive.

With the booming economy and robust GDP growth translating into an increased demand for transport, Lalu says, "We are optimistic of finishing the year with 665 million tonnes of freight against the targeted 635 million tonnes, an 11 per cent growth which is the highest in the history of Indian Railways."

It is against this backdrop that privatisation of the booming containerised railway traffic has to be viewed. The initiative, which ended the monopoly of the state-owned CONCOR, met with a good response with as many as 14 companies applying for license to avail the service. The Railways received Rs 540 crore as license fee from these companies.

Launch of freight corridor

A major feature of the Budget will be the launch of the first phase of the Rs 22,000 crore dedicated freight corridor between Delhi-Mumbai and Delhi-Kolkata, to be implemented by Japanese funding. The proposal was cleared by the Prime Minister-headed Committee on Infrastructure (CoI) recently.

The high-capacity corridor -- tracks exclusively meant for freight trains moving at a speed of 90-100 km per hour as opposed to the 25 kmph at present -- will facilitate plying of higher axle load wagon and double stack containers along the Golden Quadrilateral, connecting the four metros and major ports of the country.

This will be in addition to two other dedicated high-capacity freight corridors -- the Eastern Corridor and the Western Corridor -- which were announced by President APJ Abdul Kalam in his address to the Joint Sitting of Parliament on February 16.

The Eastern Corridor would extend from Ludhiana to Sonnagar while the Western Corridor would connect the Jawaharlal Nehru Port Trust in Maharashtra to Dadri in Uttar Pradesh. Preliminary work on these projects, estimated to cost Rs 20,000 crore, would commence within a year.

Yet the fact has to be accepted that rail freight rates in India are one of the highest among the railway systems in the world.

The need is for reducing the existing charges by setting up a Tariff Committee, which will look into the entire spectrum of tariff structure, experts point out.

It is to the credit of Railways that it has not withdrawn 20 per cent reduction in freight rates despite Rs 12 per litre hike in diesel and Rs 3000 crore burden on account of salary and pensions. A further reduction is likely because operating cost has come down by 20 per cent.

One grey area for the Railways is the persistent parcel losses. Improving its image in the perception of travelling passengers by ensuring safe running of trains and providing security to them is another.

"We should work with a smile and imbibe a caring and helping attitude towards passengers. We should celebrate the year 2006 as the year dedicated to passenger service," says the minister.