Railway Budget 2015: Fares, fuel & funds in focus

New Delhi, Feb 26: Railway Minister Suresh Prabhu will present the budget for the year 2015-16. Questions are being asked about whether the minister will take the usual route of populism or take tough calls on reforms to allow a revival of the massive state unit. [Follow Live updates of Railway Budget 2015]

Minister of State for Railways Manoj Sinha had earlier said that fares wouldn't be reduced even though diesel prices have fallen but Prabhu is expected to make a balanced call. [Railway Budget 2015: Will Suresh Prabhu give wings to PM Modi's dreams?]


He is likely to reval his plan to decrease the cross-subsidy for passenger service from earnings from freight. The railways, which is the fourth largest in the world, are expected to receive at least a 25 per cent investment to over $9 billion. [5 things to expect from Suresh Prabhu]

Sources in the NDA government said the fall in diesel prices and the hike in freight earnings have created a golden opportunity to increase investments. Will there be an increase in budget allocation to balance the disappointment caused by the lack of private sector interest in investing in the railways.

Here are five important issues related to the railway budget:

  • Passenger fare: Trinamool Congress's Dinesh Trivedi had proposed an across-the-board hike in rail fares in 2012-13, after a gap of 10 years. But he was forced to roll it back in the second and sleeper-class categories and even had to lose his post by his party leadership. Train passenger fares have been increased since then. In July last year, the Modi government's first budget had seen a hike in railway fares by 14.2 per cent and freight by 6.5 per cent.

  • Falling fuel prices: Power cost has gone up by 4 per cent even though there has been a dip in diesel prices. This has asked for a balancing act for the fuel adjustment cost-linked tariff revision policy adopted by the railways since 2013. Prabhu, as per official sources, has stressed savings from cheaper diesel totalling between $1.9 billion and $2.4 billion, beginning April 1.

  • How to raise funds: Only 317 projects out of 676 could be completed and the remaining need a whopping Rs 1,82,000 crore for their completion. Prabhu is likely to lay out a load map to attract private investment in the railways.

    Sources said the budget will have a comprehensive action plan featuring both short and long-term measures. Prabhu might announce less numbers of new trains and projects in this budget.

    "Funds allocation will be made only for those projects, including new lines, which are strategically crucial, doubling and route electrification which are nearing completion," PTI quoted unnamed sources as saying.

The railways have also sought Rs 20,000 crore from the finance ministry to deal with the safety aspect, particularly the unmanned level crossings, although one is doubtful about him receiving that much fund. Prabhu might also go for joint venture mechanism for implementing projects.

Oneindia News

(with agency inputs)

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