New Delhi, Feb. 26: Competition and the compulsions of a government going into election mode finally caught up with a monopoly.
Faced with a 3 per cent fall in the number of travellers who boarded trains this year, railway minister Nitish Kumar today unveiled a populist budget with no increase in passenger fares or freight rates.
The soft budget has fuelled speculation that the government is preparing the ground for an early general election.
The national election, which will be preceded by a round of key Assembly polls, is due in the latter half of 2004. But the heavy dose of populism in today’s budget has prompted several parties to suggest that a mid-term general election could not be ruled out.
The railways decided to rationalise the fares for the Rajdhani and Shatabdi express trains by indexing the basic fare to the superfast trains on the same route. The fare rationalisation means that the basic fares on the Rajdhani routes will now go down by about 14-22 per cent, depending on the route and class.
With airlines making a dent by slashing rates, Nitish has taken the wraps off a discounted off-peak fare structure. It will begin as an experimental scheme on the Rajdhani and Shatabdi routes during a two-month off-peak period stretching from July 15 to September 15.
But the comfort factor of the Rajdhanis, the Shatabdis and the Jan Shatabdis could ebb as waitlisted passengers will be allowed to board these trains with the same penalty applicable in mail and express trains.
The big question is: will the fares be raised sharply next year' The minister was non-committal, but railway board officials indicated that fares could rise by 5-6 per cent after the elections. “This is inevitable. Even if we manage to get the 7 per cent growth in passenger traffic, there will be a shortfall of minimum 25 per cent in the passenger revenue earnings,” said a railway board member.
Out of the 50 new trains announced, eight will cover Bengal. Calcuttans have been given a new terminal for long-distance trains at Chitpur. Nitish has spiced up his budget with a few social sops, too. (See chart)
Cancer, thalassaemia, heart, and kidney patients travelling for surgery with an attendant will get 75 per cent concessions in AC 3 tier and AC chair car and 50 per cent concession in AC first class and AC two tier of mail/express trains. Till now, this concession was extended only to the ordinary first class and second class categories.
Nitish’s budget — his second — also rationalised a part of the freight structure in a bid to win back goods traffic from road transporters. This will make transportation of goods like LPG, steel and cement cheaper.
Nitish has had to do a lot of tightrope walking to balance his books — and that has forced him to trim expenditure under several heads, including safety-related projects. The numbers in the fine print of his budget did not square with what he said on improving safety standards and passenger amenities during 2003-04, which he declared as “customer satisfaction year”.
Railway board chairman I.I.M.S. Rana said this year’s exercise was innovative as the budget proposed to net an additional Rs 2,051 crore in the next year even though fares and freight rates are not being raised.
The budget is poised on the eggshells of some assumptions — that the fare rationalisation will spark a 7 per cent jump in passenger revenues and a 25-million-tonne freight increase.
n See Business Telegraph and Metro