Feb. 26: India Inc today hailed the railway budget with tariff and freight rationalisation initiatives to arrest any fall in its market share in tandem with steps to improve safety. The industry said that consumers would be benefited greatly with the government sparing any tariff hike.
All the apex chambers and trade bodies, including Ficci, CII and Fieo complimented railway minister Nitish Kumar for not increasing the freight and passenger tariff while at the same time taking a number of positive steps for rationalisation of freight structure and reclassification of freight categories leading to reduction in bulk freight charges.
Terming the budget as a genuine attempt to make railways market-oriented, Ficci president A. C. Muthiah said, “Railway minister has attempted to make the railways genuinely market-oriented by addressing the basic problem of traffic diversion from railway network to roads.”
Tariff rationalisation measures will increase price efficiency of the railways, lead to greater volume of traffic and improve the freight earnings despite drop in rates in many commodities, he said.
Expressing similar sentiments, Confederation of Indian Industry president Ashok Soota described it as a rational and balanced railway budget.
He said the minister has taken positive and visionary steps, particularly focussing on safety and rationalisation of freight structure, reclassification of categories and introduction of new trains.
However, Assocham and PHDCCI joined forces and termed the budget proposals as a missed opportunity.
Describing the budget proposals as “populist”, Assocham president R. K. Somany said it was a “missed opportunity” for improving rail finances by removing the cross-subsidisation on account of high freight rates and low passenger fares.
He cautioned against excessive borrowing through Indian Railway Finance Corporation to meet the growing demand for investment in rolling stock, maintenance of plant and machinery and replacement of overaged assets.
Reacting critically to the rail budget, PHDCCI president P. K. Jain said, “Given that railways are the only high-capacity transport mode that can meet the long-term needs of large sized economy, the rail budget has not done much to rise above the short-term focus in its investment initiatives.”
Bharat Chamber of Commerce president N. R. Goenka too was critical of the budget. He said that it was populist in nature and lacks direction with regard to garnering funds needed for development and modernisation of railways. “The railways need to adopt disinvestment schemes and restructure operations.”
Federation of Indian Export Organisation (Fieo) said in the present global scenario it was necessary not to increase freight rates so that exporters did not have to bear any additional financial burden in making them competitive.
However, Fieo chief M Rafeeque Ahmed said that no specific mention was made giving any special attention or priority to export sector and stressed on the need to introduce more trains and additional wagons from up-country exporting centres to different port destinations.
Indian Chamber of Commerce president Vikram Thapar complimented Kumar on introducing discounts during off-peak hours and rationalisation of freight rates. “The budget has rightly emphasised on safety and capacity expansion,” he said.
Federation of Association of Small Industries of India said efforts should be made by railways to simplify the procedures for booking carriage, delivery and refund and sought their privatisation.