What Rail Budget ’13 says about Budget ’13

There is cause for hope that the Union Budget will focus more on vision than on atmospherics
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First Published: Tue, Feb 26 2013. 01 53 PM IST
Railway minister Pawan Kumar Bansal has put in place a dynamic pricing mechanism that will ensure a pass-through of increase in input prices such as fuel and electricity.
Railway minister Pawan Kumar Bansal has put in place a dynamic pricing mechanism that will ensure a pass-through of increase in input prices such as fuel and electricity.
Updated: Tue, Feb 26 2013. 07 49 PM IST
New Delhi: If the railway budget is any indication, then there is cause for hope that the Union budget will focus more on vision than on atmospherics to grab voter eyeballs.
Railway minister Pawan Kumar Bansal has, in his debut budget, started where former rail minister Dinesh Trivedi left off—rather abruptly at that; he was ousted by his Trinamool Congress party boss Mamata Banerjee—and put in place a dynamic pricing mechanism that will ensure a pass-through of in
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crease in input prices such as fuel and electricity. At the same time, Bansal also signalled that Trivedi’s proposal to set up a Tariff Regulatory Authority was in the works and the subject of ongoing inter-ministerial deliberations.
While freight rates will immediately come under the purview of the dynamic pricing mechanism, passenger fares will be spared for now—a concession the minister extended in the light of the fact that fares were increased last month. The plan is to effect revisions twice a year. As in the case of fuel prices, this will work both ways—a drop in international fuel prices will entail a reduction in domestic prices.
Net-net, the rail budget is an excellent effort from Bansal; especially given the extenuating circumstances and the temptation of playing electoral politics.
If the government (and the Congress party) approach Budget 2013 in a similar way—and the finance minister’s actions and words over the past month give us no reason to believe it won’t—we could well see a progressive and reform-minded budget being presented on Thursday.
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First Published: Tue, Feb 26 2013. 01 53 PM IST
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