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Here's where Railway revenue will come from
July 06, 2004 18:52 IST
Adopting a strategy of economies of scale, the Railways -- which plan to raise Rs 3,400 crore (Rs 34 billion) from the market -- propose to mop up additional revenue through increased volume of freight and passenger traffic rather than through raising fares this year.
"It is not mere populism but sound economics," Railway Board chairman R K Singh said, adding that the thrust of the Budget has been to raise resources through increased volume and quality of services.
In his customary post-Budget press conference, Singh said past experience has shown that increasing fares had not resulted in matching rise in revenue as traffic shifted to highly competitive road transport.
But last year's experience shows that without hiking fares the additional revenue could be generated and this had resulted in a surplus of Rs 100 crore (Rs 1 billion) despite increased fuel cost and additional expenditure due to 50 per cent dearness allowance merger with salary.
He also said that cost-cutting measures and zero budgeting adopted by the Railways had helped in generating surplus on various accounts.
Due to prudent economics, Singh said the Railways had been able to clean up its balance sheet and was able to achieve for the first time best ever figures.
After payment of current dividend of Rs 3,305 crore (Rs 33.05 billion) and Rs 300 crore (Rs 3 billion) towards deferred dividend liability, the Railways perhaps for the first time was left with a surplus of Rs 873 crore (Rs 8.73 billion), Singh said.
It is proposed to deploy Rs 158 crore (Rs 1.58 billion) of this surplus through a special Railway Safety Fund and the remaining through development fund for modernisation and development activities, Singh said.
As a result of these measures, the Depreciation Reserve Fund has been stepped up from Rs 1,900 crore (Rs 19 billion) in the Interim Budget to Rs 2,267 crore (Rs 22.67 billion).
Asserting that Railways would need more fund for infrastructure development, financial controller Vijayalakshmi Vishwanathan said the Railways would require additional Rs 1,100 crore (Rs 11 billion) budgetary support which it was confident of getting in due course of time.
Railway Minister Lalu Prasad met Prime Minister Manmohan Singh and Finance Minister P Chidambaram who had expressed wholehearted support in providing necessary funds for the development of Railways, she said.
Singh said the thrust of the Budget was on development and expansion of Railway infrastructure as envisaged in the Common Minimum Programme.
"Modernisation of Railways, replacement and renewal of assets, safety of passengers, cleanliness, improvement in passenger amenities, control over expenditure and prevention of leakage of revenue will be the priority," he said.