New Delhi: Welcoming the Railway Budget, FICCI in a statement on Wednesday said that Dinesh Trivedi has taken a bold step of raising passenger fares that had not been touched since 2002-03.
FICCI further said, "The hike will reduce, even if marginally the cross subsidisation of passenger fares from freight. The much needed investment in infrastructure will result in safety, decongestion, capacity augmentation and modernization of system, creating a more vibrant Railways."
FICCI also appreciated the efforts of the Railway Ministry to bring down the operating ratio from 95 per cent to 74 per cent in the terminal year of 12th Five Year Plan. Interestingly, the budget also makes a reference to linking the fares to fuel in the near future.
However, FICCI said on the downside that the budgeted growth in gross traffic receipts at 27.6 per cent for the next fiscal is an ambitious target, given that the compounded annual growth rate (CAGR) in gross traffic receipts for the decade ending 2010-11 was only 10.4 per cent.
More importantly, the budgeted freight earnings target for next fiscal at 30.2 per cent may be difficult to achieve (vis-a-vis CAGR at 10.3 per cent for the last decade).
FICCI also noted, that the share of freight in total railway earnings have declined from more than 80 per cent in 1950-51 to 66 per cent in 2011-12, not on account of an increase in share of passenger fares (declined from 31 per cent in 2002-03 to 27 per cent in 2012-13), but due to an increase in other earnings over the years.
"The finances of the Railways in the current fiscal may not be in ideal shape, given that the surplus of receipts over expenditure (after adjusting for dividend payments) has been revised downwards from Rs 5,158 crores to Rs 1,492 crores. This shows a sharp deterioration in railway finances, which is not healthy," FICCI said.
FICCI further said that the Railway Budget for 2012-13 is an attempt to put the Railways finances back on track through revenue mobilisation efforts.
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