Railway Budget: Key extracts

The budget activity kicked off on Friday with Railway Minister Lalu Prasad presenting the railway budget just a short while ago. Below are some of the key announcements made by the minister:

• With passenger fares for the masses not tinkered with, the news is certainly good for this category of passengers as there will not be any additional burden on them. However, 50% concession would be given to farmers in sleeper class. Further, there was an announcement made pertaining to the launch of low fare A/C trains -- Garib Rath -- the fares for which would be lower by 25% to the Third A/C fares.
• There was some good news for the higher-class passengers with the First Class A/C and Second Class A/C fares having been reduced by 18% and 10% respectively. This move by the minister is seemingly to ward off, to a certain extent, the competition being provided by the low cost/budget airlines by wooing passengers back to rail travel by increasing the differential between rail and air fares. Further, upto 30% discount would be offered during the non-peak season.
• Announcement of the launch of 55 new trains.
• On the industry front, the Railway budget has refrained from hiking freight rates, seemingly in wake of the competition being thrown up from road transport, thanks to the government's ambitious road development projects, which has led to significant improvement in the quality of road transport. In fact, the freight rates for the movement of diesel and gasoline have been reduced by 8%. A freight discount of 20% during peak season has also been announced, clarity on which is awaited. Further, construction of freight corridors at a cost of Rs 220 bn has been announced in the Railway budget.
• The minister also talked about increasing/introducing new safety measures for railways. The Safety fund outlay has been pegged at Rs 22 bn for FY07.

The Railway Budget 2006-07

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