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Corporatise Railways for viable operations

The Economic Survey on Tuesday asked the government to corporatise Railways to ensure viable commercial operations while restricting its role to policy formulation saying financial crisis of the transport monolith was mainly due to high freight rates to benefit passengers.

"The Indian Railways must eventually be corporatised into Indian Railway Corporation. The Government of India should be in charge of setting policy direction while Indian Rail Regulatory Authority should be set up to regulate tariffs," the survey presented in Parliament said.

The root cause of the financial problems confronting the Indian Railways included lack of adequate productivity, that are commensurate with exorbitant wage bills, it said while suggesting that cross subsidisation at the expense of freight services be addressed immediately.

"Cross-subsidisation of passenger services by freight revenues as also subsidisation within passenger and freight segment and operation of certain uneconomic services caused a loss of Rs 40 billion during 2000-01", the survey said.

"The key challenge for Indian Railways in the passenger traffic segments is to maintain its obligations on low price services while at the same time increasing both capacity and utilisation in upper class, through a strategy for higher growth in traffic as well as appropriate tariff rebalancing," it said.

Indian Railways, one of the largest railway systems in the world, had experienced a continuous decline in market share in the transport sector and the freight traffic during the first five months of the financial year stagnated at last year's levels, the survey said.


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