Railway Budget 2008 | India Inc expects1% cut in freight tariff

Railway Budget 2008 | India Inc expects1% cut in freight tariff
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First Published: Mon, Feb 25 2008. 03 43 PM IST
Updated: Mon, Feb 25 2008. 03 43 PM IST
New Delhi: No hike in passenger tariff and about 1% cut in freight tariffs are being anticipated by India Inc. in Railway Budget for 2008-09 in view of turnaround that the railways witnessed over the years due to which they are expecting a minimum of 15% increase in passenger and freight inflows in next fiscal.
According to a survey carried out by Assocham with 300 CEOs on Railway Budget Expectations for 2008-09, 210 said that Lalu Prasad, Railway Minister would keep passenger tariff of all categories virtually untouched to avail railways passengers advantages of its turnaround.
Key Findings
* 70% CEOs were confident that Railways Minister will announce 1% freight cut in all categories of industrial freight to ensure infrastructure’s contribution to overall inflation remains under contained limits
* Since price of steel, cement and petroleum products like diesel and petrol do not have a spiraling impact on prices of essential commodities and the industry gets respite, demand for rationalization in freight rates is seen to be on the higher side, given the after effects of railways turnaround
* About 90 CEOs held that in view of elections, Railways Minister may announce certain populist measures like decrease of 10-12% fares in passenger and other ordinary trains but may not cut freight rates.
* The general expectation is that railways would increase target for freight loading in 2008-09 to about 900 million tonnes against its previous budget targets of 785 million tonnes as most of these have been accomplished
* Since freight loading through railways would be catching up in view of increased competition with road and air traffic, it is anticipated that a bare minimum 1% cut in railway freight tariff would be announced in the budget
* During 2006-07, freight earnings to railways witnessed growth of 15-17% and by end of current fiscal, these are anticipated to grow well within 20% range; also in 08-09, freight earnings would grow at a whopping rate of not less than 22%
* Regarding modernization, over 250 CEOs felt that the Railway Minister might unfold his vision to upgrade 100 railway stations through public-private partnership and unfold package and welfare schemes for railway employees, especially those living in railways dwellings around the sttions where conditions have become miserably and pathetic
* Indian Railways can substantially increase revenue generation if it leases out with proper identification, at least 100 railway stations for modernization through PPP
* Railway Minister to incorporate provisions with sufficient fiscal concessions to lure real estate promoters to come forward to develop wasted land that Railways have in its possessions to put up motels, smaller huts and apartments, logging houses and pizza huts to enhance its revenue and make use of the land for profiteering
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First Published: Mon, Feb 25 2008. 03 43 PM IST