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Lalu brings down rail fares

The fare war between railways and low-cost airlines has taken a new turn with the announcement of the Railway Budget 2006-07. Presenting his third populist budget in succession, Railway Minister Lalu Prasad on Friday effected a steep reduction in air conditioned fares and proposed no increase in second class passenger fares. Highlights

india Updated: Feb 25, 2006 18:57 IST

The fare war between railways and low-cost airlines has taken a new turn with the announcement of the Railway Budget 2006-07.

Presenting his third populist budget in succession, Railway Minister Lalu Prasad on Friday effected a steep reduction in air conditioned fares and proposed no increase in second class passenger fares.

He also did not propose hike in across-the-board freight rates but rationalised freight tariff that will bring down diesel and petrol transportation by eight per cent.

Bonanza for passengers

In a budget that comes ahead of Assembly elections in five states, he also announced introduction of fully air conditioned "Garib Rath"(poor's chariot) on a pilot basis in which fares will be about 25 per cent lower than present AC-III tier fares.

In an apparent bid to bring back passengers from low fare air travel, Prasad rationalised the passenger tariff structure, proposing a reduction in AC first class fare by 18 per cent and AC-II by 10 per cent.

The Minister's generosity covered extension of 50 per cent concession in second class fares to sleeper class for farmers and milk producers for travel to institutes of national level for training.

Similarly, persons who have lost their limbs in accidents or otherwise will get 50 per cent concessionin second class and sleeper class for travel to national level institutes for transplantation along with one attendant.

New and high speed trains

Prasad announced introduction of 150-km speed train, recently started between Delhi and Agra, on Delhi-Kanpur-Lucknow route.

There are proposals for 55 new trains, extension of services for 37 trains, and increase in frequency for 12 trains.

Dedicated freight corridor

The construction of a dedicated freight corridorsat a cost of Rs 22,000 crores on eastern and western routes was also announced.

Again in an attempt to fight competition from road, Prasad announced that rationalisation of goods traffic will continue further by reducing the number of commodity groups from 80 to 28. The lowering of highest class to 220 will result in freight rates of diesel and petrol falling by eight per cent.

Budget estimates

Projecting healthy finances, Prasad claimed that the likely end year fund balance will be Rs 11,280 crores during the current year.

The annual plan for Railways for 2006-07 has been fixed at Rs 23,475 crores of which Rs 7,500 crores will come from general exchequer, Rs 10,794 crores through internally-generated resources and Rs 5,170 crores through extra-budgetary resources.

The budget estimates for 2006-07 pegs the freight loading target at 726 million tonnes and freight output at 479 billion tonne kms. Freight revenues have been estimated at Rs 40,320 crores, passenger (Rs.16,800 crores), coaching (Rs.1,400 crores) and sundry other earnings (Rs 1,308 crores).

Gross Traffic Receipts (GTRs) for the coming year have been placed at Rs 57,978 crores and ordinary working expenses at Rs 38,300 crores. Appropriation to Pension Fund has been placed at Rs 7,790 crores and Depreciation Reserve Fund at Rs 4,307 crores. Internal generation before dividend is expected to be Rs 14,293 crores.

Reviewing current year's performance, Prasad claimed a record-breaking performance in the revised estimates in the first nine months of 2005-06.

Growth in freight-loading and revenues is estimated at 10 per cent and 18 per cent, respectively. Loading target has been revised from 635 mt to 668 mt and freight revenue target went up from Rs 33,480 crores to Rs 36,490 crores.

Gross Traffic Revenues are expected to be Rs54,600 crores which is 16 per cent higher than the previous year.

Year of passenger service with a smile

Declaring 2006 as a year of passenger service with a smile, Prasad announced reduction of charges leviable on issuance ofe-ticketsopening of 800 more UTS centres and installation of 200 automatic ticket vending machines in Mumbai suburban areas.

As part of improvement in passenger amenities, modern facilities such as ATMs and cyber cafes will be provided at all major stations while the pilot project for upgradation of retiring rooms and waiting rooms will be expanded further under a public-private partnership.

The Garib Rath superfast AC trains will run between Delhi-Patna, Delhi-Mumbai, Delhi-Chennai and Saharsa-Amritsar.

In line with the objective of providing affordable air conditioned service, the Railways will also make efforts to start fully air conditioned double-decker trains.

The budget proposed to undertake a major simplification and rationalisation of goods tariff and various discount schemes to recapture traffic had been announced.

A non-peak season discount scheme under which a 15 per cent freight rebate for incremental freight revenues of over Rs 5 crores in a month and 10 per cent if it is less than Rs 5 crore is part of the proposal.

First Published: Feb 25, 2006 18:57 IST