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BW Businessworld

2012: A Dismal Picture For Cash-Strapped Railways

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It was a tumultuous year for the Indian railways as a cash-strapped ministry saw four ministers in quick succession resulting in indecision and delay in policy making process.
While Railway Ministry came to the Congress fold after a gap of about a decade and half after the withdrawal of support by Trinamool from the government, the issue of passenger fare hike seem imminent.
Railways witnessed a widening gap between operational cost and passenger earnings while freight revenue also fell below the target in 2012. Railways earned Rs 67,879.95 crore till October as against the target of Rs 70,147.74 crore, 3.23 per cent less than the budgeted provision.
In view of this shortfall, the plan outlay for the current fiscal has been downgraded from Rs 60,100 crore to Rs 55,881 crore.
Currently railways has 347 ongoing projects under new lines, gauge conversions and doubling having as throw forward of about Rs 1.47 lakh crore. The shortage of funds has forced railways to curtail allocations for majority of projects.
The year witnessed commissioning of the much delayed Rae Bareli coach factory. Besides the factory, railways also announced setting up of a wheel factory at Congress president Sonia Gandhi's constituency.
The year began with Railway Minister Dinesh Trivedi proposing a fare hike of about 15 per cent passenger fare in the Rail Budget. However, it was rolled back as Trivedi drew wrath of Trinamool supremo Mamata Banerjee.
Trivedi was aiming to mop up about Rs 4000 crores from the passenger fare hike. He was, however, replaced by Mamata loyalist Mukul Roy, who continued to remain mostly absent from the ministry and run the key infrastructure department for nearly seven months from Kolkata. 
Though many West Bengal-centric projects including Kanchrapara rail factory, beautification of stations, opening of passenger reservation centres in the eastern state were initiated during Roy's regime, the much-needed move to hike passenger tariff gained dust.
After the withdrawal of Trinamool from the UPA government in September, Congress' C P Joshi was given additional charge of Railway Ministry for about a month. However, his brief tenure saw the revival of the proposal for setting up of Rail Tariff Authority (RTA) to suggest tariff hike in passenger and freight.
Pawan Kumar Bansal, who became the fourth minister in a year to occupy the Rail Bhavan, has been giving ample hints of raising the fares realising the dire financial needs of railways.
"If passenger fares will be hiked then it will not be for the sake of raising fares, it will be done to improve passenger amenities," he had said after taking over in October.
Both ministers of State for Railways - Adhir Ranjan Chowdhury and K J Suryaparakash Reddy - advocated strongly for raising passenger fares to generate funds.
Reviewing the performance, Prime Minister Manmohan Singh has asked the Railways to expedite the process of setting up Rail Tariff Authority.
Singh has also asked the national transporter to finalise bidding documents for two big ticket projects - locomotive factories at Madhepura and Marhora in eastern state Bihar.
Though seven routes have been identified for undertaking feasibility survey for running bullet trains at 300 km per hour speed, the Mumbai-Ahmedabad route is to be taken up by railways as a priority.