Show Political Will and raise Passenger Fare: ASSOCHAM

ASSOCHAM meetin on Rail Budget
Business leaders participate in an interactive session organised ahead of Railway Budget by ASSOCHAM in New Delhi, on Feb 23, 2016

New Delhi: Ahead of the Railway Budget, industry body ASSOCHAM today asked Railway Minister Suresh Prabhu to muster political courage and go in for a hike in the passenger fares, saying they have been kept low at the cost of freight traffic.

“There is lack of political will to raise passenger fares even though the reluctance is not shared by passengers, who would be willing to pay more provided the hike is accompanied by better services including timely arrival of trains, cleanliness at stations, safety and improvement in food,” the chamber said a memorandum to the Railway Minister.

It said the fare increase would reduce the drastic losses on passenger traffic, now running at 68 per cent of passenger earnings.

“Passenger losses (including suburban and non-suburban) have grown from 72 per cent of social obligation cost borne by the railways in F1975 to 95 per cent in F2014. The decline in passenger losses would also have a significant positive impact on railways’ finances.

“It might also enable the railways to stop whittling away their financial cost advantage over roads as a mode of transport, by creating the potential to reduce the over-recoveries on freight to make up for the under-recovery in the passenger segment,” ASSOCHAM said.  Due to high freight charges, railway’s market share in freight has eroded.

ASSOCHAM PresidentThis year’s Railway Budget is focused on ‘Transforming Indian Railways – to transform modern India’ and has identified ‘short and immediate term wins’ and is on track for a ‘medium term’ revival plan. With many fresh ideas, this transformational Budget signals that railways are firmly on track to becoming a unique integrator of India’s growth story: Rana Kapoor, President ASSOCHAM

The total share of railways in the total transportation of freight traffic has declined from 89 per cent in 1950-51 to 36 per cent in 2007-08. At present, more than 65 per cent of the earnings of Indian Railways come from freight and around 25 per cent from passengers.

Assocham asked the Minister to speed up the public-private partnership (PPP) model for modernisation of railway stations. Mr. Prabhu had announced in his last Budget that the government will modernise 400 railway stations.

AK Agarwal, Chairman of ASSOCHAM National Council on Railway said the freight rates are used to cross-subsidise the passenger fares and this should be minimised.

The chamber has also sought removal of anomalies in the freight tariff and other charges for specific industries like aluminum, steel and iron ore.

It has sought removal of port congestion charges on aluminium industry related commodities such as alumina, bauxite, CP coke, caustic, furnace oil and coal.

Similarly, it said, the classification of these commodities should also be changed to bring the freight burden down on the crisis hit sectors.

Moreover, ASSOCHAM said, the modernisation of stations in the PPP model should be speeded up and the Swachch Bharat be implemented in all earnest in trains and the stations.

> The focus of the Budget is on enhancing customer experience and improving operating efficiency, while according greater transparency and accountability to operations of Indian Railways by means of innovative technological solutions. It budgets an increase of funds to the tune of 67% for passenger amenities and 52% for plan spending. Further, the operating ratio is targeted to improve to a 9-year low of 88.5% in FY16.

> The Railway minister has clearly identified IRCTC – the most successful public e-commerce venture as the central platform for introducing state-of-the-art initiatives such as SMS alerts, e-catering, disposable bed rolls. The Budget through focus on design & innovation led improvements, echoes the Government’s multifaceted ‘inclusive development’ agenda by furthering programs of ‘Make in India’, ‘Swachch Bharat’ and ‘Digital India’.

> By laying down the foundation for reviving investment through augmentation of capacity, the Rail Budget also demonstrates growth focus of the Government. Towards this, an allocation of INR 961 billion for doubling, tripling, quadrupling work and electrification has been made.

> The Rail Budget proposes self-sustainability and improved financial health, by creating fresh avenues of long-term financing via a revamped PPP model, investments from insurance and pension funds, monetization of surplus land resources, tendering through EPC process, to meet the envisaged investment requirement of Rs 8.5 lakh crore over the next five years

Fare hike is risky and dangerous, but there is just no other option. The mad rush in Mumbai’s local trains is a nightmare for commuters. With over double the number of passengers squeezed during peak hours, the biggest demand in the budget this year is for more trains for a decent commute.

“Students like us suffer because of crowds and to stop this, we need more coaches,” said a ‘Mumbaikar’ when asked about his commuting experience in the local trains. For senior citizens, the struggle for space is even more exhausting. “I am 73 and during peak hours it’s very difficult. A separate coach for senior citizens should be provided along with those dedicated for the specially-abled,” said a commuter. And women commuters demand the number of ladies’ compartments be increased.

Mumbai’s suburban railway network carries over 75 lakh people daily. Shockingly, since 2001, 51,000 such people have lost their lives. On an average, 3,400 passengers are killed on Mumbai’s tracks annually.

“Every day 10 commuters are dying on tracks due to overflowing trains. Today, in a train they are packing commuters of 10 to 15 stations. In 3 stations that train is packed. It makes no sense,” said Deepak Gandhi, former President of the Mumbai Suburban Railway Passengers’ Association.

Pointing out a solution to overcrowding, Mr Gandhi had recommended that the railway authorities introduce a cyclic timetable format. A method based on three key principles – limited loading, uniform frequency and clearing traffic sector-wise. This, however, has not been implemented yet.

Local trains are called Mumbai’s lifeline and for good reason. Mumbai is the only Indian city where millions depend on the local train and yet commuters complain that travelling conditions have hardly seen any significant improvement over the years. The Railway Minister is from Mumbai and understands this pressing issue, but will his budget bring some cheer for the city? That remains to be seen.


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