Rail fares hiked!

The steep hike in passenger fares and freight tariff was imminent as the state-run transporter has been reeling under severe financial stress.
Railways needs Rs.4.5 lakh crore to complete ongoing projects which are stuck because of a shortfall in revenue generation through internal resources, failure to attract private investors and the Centre's fiscal constraints.
The transporter has failed to convince the Centre to pitch in resources from the general exchequer through gross Budgetary support. It had to cut down its total plan outlay for the 12th five-year plan period from Rs.5.48 lakh crore to Rs.5.19 lakh crore, and the gross budgetary support from Rs.3.16 lakh crore to Rs.1.94 lakh crore, including Rs.1.10 lakh crore earmarked for the Dedicated Freight Corridor and other projects of national importance.
The plan support for railways in the interim Budget was just Rs.30,000 crore for 2014-15. At a time railways was spending around 70% of its revenue on salaries, passenger subsidy which has touched Rs.26,000 crore, has bled the transporter white.
While the national transporter needs a huge investment to upgrade its signalling system and strengthening tracks to prevent accidents, it doesn't have enough money to do that.
The operating ratio, a measure of expenses as a percentage of revenue, deteriorated to 90.8% in 2013-14 compared with a Budgeted 87.8% and 90.2% in 2012-13. The railways has targeted to improve this to 89.8% in 2014-15.
Faced with a financial crunch, it has failed to manage funds for modernization and expansion after paying its staff, fuel and pension bills. Safety has taken a back seat. There is an urgent need to improve safety standards.
With the railways' revenues not keeping up with projections and the transporter facing a drop in passenger numbers, the BJP-led government had to bite the bullet.
The government is also pushing the proposal to allow 100% foreign direct investment through the automatic route in various segments like rolling stocks and tracks for high-speed trains, station development and warehouses.

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