Lalu Prasad: Smooth run

New Delhi, Feb. 23: Lalu Prasad is likely to focus more on increasing the volume of traffic than on raising freights and fares in railway budget which he will present on Monday.

With Uttar Pradesh elections round the corner and prices scorching consumer pockets, there appears to be little scope for a fare or a freight hike this time. “In fact the minister could even cut freight rates for food items and select core sector goods,” a senior official said.

The political flavour to the budget will most likely be in the form of new trains and projects for Uttar Pradesh and Lalu Prasad’s home state Bihar.

Senior officials said with the railways operating at close to peak capacity it will be a challenge to maintain the high growth rates of the last two years.

“In the course of the year, the number of railway lines cannot be suddenly increased. We will have to stretch our existing resources and run more trains on the existing network,” a senior official said.

With wagon loads close to permissible limits and the number of freight cars to a locomotive already at a maximum, the railways will indeed find it tough this year.

A senior official said the emphasis will be to speed up the pace of loading and unloading through a round-the-clock schedule and greater automation, so as to reduce the turnaround time of goods trains.

The new passenger trains will help the government to score some political points but the task of running the goods trains will get that much more difficult. Freight accounts for more than two-thirds of the earnings of the railways.

Since 60 per cent of the revenues of the railways come from transporting coal and iron ore, improving the movement of these two commodities will have to be given high priority. The movement of other bulk goods such as cement and fertilisers needs to be improved as well.

Sources said that the outlay for the railway budget is expected to exceed Rs 30,000 crore compared with Rs 23,700 crore during 2006-07. With the railways accumulating substantial cash reserves, a major chunk of the finances are expected to be generated internally.

The railways will also borrow from the market, while the government will give budgetary support for special projects in the northeast and Jammu and Kashmir, a senior official said.

In the previous budget, the freight rates were unchanged, though there was a reclassification of goods that pushed up revenues.

A reclassification was also done in the middle of the current fiscal that led to an increase in the freight charges for goods such as fertilisers.