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Railway Budget 2012: Possibility of fare hike remote

Railways EDITORS PICK Attract private investments in Railways: CII Fix rail finances before High-speed trains Pay more for your tea, snacks at Western Rly stations Why you should keep 75% of your portfolio in bank FDs 'Govt should not postpone important policy decisions' RELATED ARTICLES Rail Budget 2012: Need to focus on finances, says ICICI Securities Rail Budget 2012: Railways hike fertiliser, foodgrains loading rate Rail Budget 2012: Hike rail fares to modernise fund starved Railways, says ASSOCHAM Cement prices zoom on rail freight hike Budget 2012: Logistics sector should get industry status, says TCI NEW DELHI: The Rail Budget to be presented tomorrow may continue with the practice of not raising the fares and freight rates but the possibility of imposition of a safety cess may not not be ruled out, at least on the higher class fares. As Trinamool Congress leader and Railway Minister Dinesh Trivedi rises to present his maiden budget he is expected to carry on with the practice of not not tinkering with the second class fares like his predecessors, including Mamata Banerjee, over most part of the last decade. There is speculation that the budget could bring in a safety cess following a recommendation by the Kakodkar Committee report which went into issues relating to safety over the huge railway network. The Committee had suggested a cess to realise money to the tune of Rs. 5,000 crore, to fund projects especially for safety upgradation of signalling and telecommunication systems. Budget at ET: Budget 2012 | Union Budget | Railway Budget 2012 | Budget News | Economic Survey 2012 As he does the tight ropewalk, Trivedi may also introduce a mechanism to provide cushion for meeting costs on account of any spike in fuel prices. There is a suggestion for introducing a fuel adjustment component (FAC) in the basic fare to insulate railways from fuel price hike. Railways shell out Rs 19,000 cr as part of its fuel expenditure to run its huge fleet of diesel locomotives adding to the total expenditure placed at Rs 70,000 cr in the current financial year. Indications are that the Railways have got only Rs 25,000 cr as gross budgetary support from government despite its demand of Rs 50,000 cr to tide over its financial crisis. Railways had got Rs 20,000 cr as GBS in the current fiscal. Trivedi could also spell out plans for internal generation of fund from additional resources like commercialisation of stations.

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