CII, FICCI hail rail budget as ‘balancing act’ despite fund crunch

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Railway minister Dinesh Trivedi’s maiden rail budget found favour with corporate India. Apart from hailing the budget as a bold and pragmatic one, industry bodies welcomed the passenger rail fare hike as a prudent fiscal measure.

The rail budget is a good balancing act, given fund constraints, applauded Confederation of Indian Industries (CII) that claimed the budget to be largely in alignment with its recommendations. “The five-point agenda outlined in the budget along with focus on bringing down operating ratio through greater efficiency will go a long way in infusing the necessary momentum to rail infrastructure upgradation,” said Chandrajit Banerjee, director general, CII.

The announcements of a new member (Railway Board) for public private partnership (PPP) and Station Development Corporation have also been applauded by corporates as it would help bring in guidelines to attract private investments

“Separate railway tracks for freight movement will help in reducing traffic congestion,” said P. Murari, adviser to Federation of Indian Chambers of Commerce and Industry (FICCI) president.

Pointing out the budget’s reference to linking fares to fuel in the near future, Mr Murari said, “The efforts to bring down the operating ratio from 95 per cent o 74 per cent in the terminal year of 12th Five Year Plan. is laudable.”

However, on the downside, the budgeted growth in gross traffic receipts at 27.6 per cent for the next fiscal is an ambitious target, opines FICCI. The budgeted freight earnings target for next fiscal at 30.2 per cent may be difficult to achieve as the share of freight in total railway earnings has dipped to 66 per cent in 2011-12.

The downward revision of the surplus of receipts over expenditure from Rs5,158 crore to Rs1,492 crore shows a sharp deterioration in railway finances, which is not healthy, FICCI cautioned.