One Howrah –Chennai Duronto will be announced and the Vision 2020 will be followed as far as practicable. There is nothing new, all old wine in new bottle. Only Dineshji will have to think about how to minimize the loss for not raising the train fare for the last ten years. The expenditure and income ratio of 100:106 in last December was quite frustrating. It has come down to 91.1 but for the modernization a huge amount is required, without that safety and security of passengers will not be ensured.
This modernization includes signalling system and level crossing also. In the previous year, the Finance Ministry sanctioned Rs 20000 crore to Railways. This year there is the demand for Rs 50000 crore. Half may be available. Train fare may be raised because next railway budget will have to be a more populist budget keeping an eye on next Lok Sabha elections. It may be that the Upper class fares, which have not been changed since 2002 -03, may be considered for revision. Thus AC fares may be increased only. The fare hike may be related to the hike of diesel price.
According to ICICI securities, focus should be to put the finances in order. The operating ratio of the railways has remained very high and its cash reserves have also been declining. In the backdrop of the recent hike of around 20% in freight rates, ICICI securities said it is likely to remain unchanged. Many groups are urging the government to shore up the finances of the railways. Greater private sector participation in India’s railway sector may be considered. But there should be clear guidelines to attract private investments. Currently investment through Public Private Partnership represents just four per cent of all rail investment.
Thus the Railway Budget this year is facing a tough time. Unless proper motivation is there in the budget, the plans may fail miserably. It will be an aimless budget altogether from which no long run benefits will be accrued, which does not augur well for the UPA government that had already lost its bright image.