Railway fare hike was long overdue: Ex.CRB J.P.Batra

l2006121111541J.P.Batra feels there is a need to generate more internal resources for modernisation of Railway system and to improve passenger safety and amenities. This hike was essentially linked to the fuel adjustment surcharge and therefore it is the right one, he says.

नयी दिल्ली New Delhi:  The government on Friday announced a hike in Railway fares with effect from June 25 – increasing passenger fares by 14.2 percent and freight charges by 6.5 percent – just days before the Budget.

Speaking on the development, JP Batra, former Chairman, Railway Board, said the present hike in passenger and freight together in the remaining period of the year will generate around only Rs.11,000 crore of revenues for the cash-strapped transporter, which is reeling under an annual loss of about Rs.29,000 crore on passenger traffic alone.

He thinks the step was long overdue and there is a need to generate more internal resources for modernisation of railways for improving passenger amenities. Below is the transcript of JP Batra’s interview a TV Channel.

Q: The railway finances are not looking good, annual loss of Rs.26,000 crore on the passenger segment, the railway is falling short of the revenue target. In the light of these numbers what do you make of the hike that the government has announced?

A: As far as the present hike is concerned, it was announced in the last Interim Budget but its implementation was postponed. It was decided that the next government will take the decision. The decision has been taken and unfortunately in that process Indian Railways has lost a bit of time. I think the present hike in passenger and freight together in the remaining period of the year will give the transporter approximately Rs.11,000 crore while the annual loss is roughly about Rs.29,000 crore on passenger traffic alone. Therefore I personally feel it was a step long overdue which has been taken now. There is a need to generate more internal resources for modernisation of railways, for improving passenger amenities and railways need money for that.

Q: As you pointed out annual losses on the passenger segment at Rs.29,000 crore this fare hike is likely to lead to additional income of around Rs.11,000 crore but still staring at a loss of Rs.18,000 crore annually. As you said the hike has come too late, is it too little as well? Are you expecting more hikes going into the next Budget at least if not this one?

A: This hike was essentially linked to the fuel adjustment surcharge and therefore it is the right one. Whatever has not been done in the last many years cannot be straight away done in one year alone. Therefore I personally believe that the present government will ensure that the fuel adjustment component is taken into account and to that extent the passenger losses need not be cross subsidised by the freight. So, this effort will continue I suppose in future as well.

Q: You are expecting more staggered hike possibly, is that what you are saying?

A: Maybe in the next Budget, next year.

Q: Your thoughts on Foreign Direct Investment (FDI) in Railways, is it likely that it is going to go through? We understand the cabinet is going to meet on the decision and if it does go through how will it help?

A: There are some segments of Railway activity where private industry may find it attractive. They are essentially looking at areas where the returns can be seen coming in about 10 to 12 years or at the most 15 years period of time. Therefore on lines which are going to carry huge amount of freight traffic, container traffic or the production areas, these are the areas where private investment may be forthcoming and a number of organisations have shown interest in this. So, I suppose once the decision is taken to permit FDI some amount of funds will start. However, the difficult area is going to be the so called bullet train where the private investment may not come immediately.

Q: What really are you hoping for the railways from the upcoming Rail Budget, more rail freight corridors, what really are your expectations?

A: The government and the Railway Minister specifically has already given indication that its priority in this Budget is going to be the safety followed by security and passenger amenities. I suppose the Railway already has with them the report of Kakodkar Committee where the emphasis has been laid on increasing investment in technology to improve safety and they have talked of a budget of spending of about Rs.40,000 crore odd in five years. So this is one area where some initial steps would be taken and it will be very clearly visible. However, it was the National Democratic Alliance (NDA) government in 2000-2001 which had created a safety fund to give a push to improving safety on the Railways. Once again the opportunity is with the NDA government for taking a similar step to ensure that adequate investments in the area of safety take place so that railway ultimately reaches the level of zero accidents which is the ultimate aim of Indian Railways.

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