Railways likely to get Rs. 280bn funds in Rail Budget FY14

India Infoline News Service | Mumbai |

Railways expect to generate Rs. 70 billion revenue from internal generation and Rs. 180 billion from market borrowing in next fiscal

Railway Minister Pawan Kumar Bansal is all set to announce a slew of passenger-friendly measures such as improvement in catering service, maintaining cleanliness at rail premises, introducing Braille stickers in coaches for visually-challenged passengers and development of stations in his maiden Rail Budget.

All eyes will be on Mr Bansal on Tuesday on whether he yields to pressure of hiking passenger fares yet again or looks at other measures to mobilise resources to offset the burden of the recent diesel price hike.

Mr Bansal had on January 22 hiked passenger fares across-the-board after the Railways faced a loss of about Rs. 250 billion in the passenger segment. Railways had aimed to mop up additional revenue of Rs. 66 billion but the fuel hike had wiped out Rs. 33 billion, Mr Bansal had said.

While there are possibilities of minor tinkering in freight rates despite resistance from the industry due to the slow economy growth, there will be some announcements of freight schemes to attract more loadings in FY13-14.

With Mr Bansal heading Rail Bhavan and the key ministry back with the Congress party after almost one-and-a-half decade, speculation is rife about announcement of 100 new trains including AC double deckers, extension and increase of some popular passenger services.

Though the Congress is opposing the Trinamool government in Bengal, MoS Railways Adhir Ranjan Chowdhury might have his say with likely provisions for new trains including Berhampur-Sealdah passenger, a direct train for New Jalpaiguri from the capital and pantry cars for Bengal-bound trains.

While the focus of the Budget is on providing more amenities to rail users, Mr Bansal will initiate certain steps to earn more revenue from the alternative sources such as commercial utilisation of surplus railway land, advertising and other sundry business.

Since high-speed train is the latest buzz in Railway Ministry, there will be a few proposals for it in the Budget.

The Rail Budget 2013-14 is set to announce procurement of two high-speed self-propelled accident relief trains (SPART). With a speed of 160 km/hr, the SPART will enable rescue equipment to reach the accident site faster and help speedy rescue and restoration work.

The Ministry is going ahead with the proposal for setting up Rs. 10 billion MEMU (mainline electric multiple unit) coach factory in Rajasthan to cater to the growing demand of faster local and suburban service. ailways is likely to miss the revenue target of Rs. 1.35 trillion for the current fiscal as the total earning for the 10 months from April 2012, to January 2013, has been Rs. 1.01 trillion, which means it needs to earn Rs. 340 billion in the next two months to meet the target.

Despite the freight hike in March 2012, Railways is set to miss its freight earning target of Rs. 893.39 billion this fiscal as the total goods earnings for the last 10 months from April to January is Rs. 700.67 billion. Even the freight loading target of 1,025 million tonnes (MT) is likely to fall short by 15 MT as Railways could transport only 927.90 MT during the last 10 months.

The total passenger earnings for 10 months have been Rs. 259.24 billion, whereas the target for the current fiscal is Rs. 360 billion. Railways, which had got Rs. 240 billion as general budgetary support (GBS) in the last budget, sought Rs. 380 billion from the government. It is likely to get about Rs. 280 billion as GBS in the Rail Budget FY13-14.

The annual plan size of Railways was slashed down to Rs. 520 billion from Rs. 610 billion for 2012-13 due to the overall cut in the expenditure. The annual plan size may touch Rs. 650 billion in the next fiscal.

In the last Rail Budget, Railways had predicted its operating ratio to be 84.9%, whereas at present its operating ratio is hovering around at an unhealthy 88% to 90%.

As far as rolling stock programme is concerned, the announcement will be made for manufacturing of 4,200 new coaches including 600 LHB (Linke Holfmann Busch) coaches in the Rail Budget 2013-14.

While provision for manufacturing of 670 new locomotives including 20 LNG locos will be made, the Budget will also account for manufacturing of about 16,000 new wagons.

Railways proposes to run as many as 70 heavy haul freight trains over the next year in a move which will not only help decongestion of the busy trunk routes, but also enable it to manage its freight traffic till the dedicated freight corridor takes shape.

Despite cash crunch, funds are likely to be announced in the Rail Budget 2013-14 for long pending projects that include laying new lines, electrification, gauge conversion and doubling.

Currently, there are about 347 rail projects worth Rs. 1.47 trillion pending. Railways is planning to complete some of these works in the next fiscal. Certain pending projects involving laying of new lines as last-mile connectivity are being identified and funds will be allocated in the budget for completion of those tracks.

Planning Commission has earmarked Rs. 1.94 trillion as General Budgetary Support (GBS) for Railways in the 12th Five-Year Plan. It has asked the national transporter to earn Rs 1.05 trillion from internal generation and Rs. 2.2 trillion through extra budgetary resources during (2012-17).

Railways expect to generate Rs. 70 billion revenue from internal generation and Rs. 180 billion from market borrowing in next fiscal. Government may soon notify some works connected with the Railways like afforestation and construction of approach road for crossings under its ambitious rural job scheme which is likely to find a mention in the budget.

Industry has called for speedy implementation of key railway projects such as the Dedicated Freight Corridor, high-speed rail corridors, rolling stock and other capacity enhancement works in the Rail Budget 2013-14.

Currently, industry awaits changes in policies relating to wagon leasing, private freight terminals, special freight train operations which would promote private sector participation in the rail sector.


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