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India Inc., sees both good and bad in Rail Budget

By Staff
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New Delhi, Feb 24 (UNI) India Inc., by and large had a good word about Railway Minister Lalu Prasad's third budget, presented in Lok Sabha today, complimenting him for the sound financial health of the largest public sector undertaking and efforts to reduce dependance on budgetary support, but said the Minister was riding on a train of populism.

''It has not done enough to rise above populism. Besides, strategic measures to capture a substantially larger share of the growing goods traffic and the railways entry into a renewed growth phase are missing,'' Dr Bibek Debroy, Secratary General of PHDCCI and a well-known economist, said here.

Dr Debroy went so far as to say that the Railway Budget 2006 lacked commercial orientation and did not outline further measures to put the railways on a high growth trajectory.

''The practise of high freight tariff subsidising the passenger segment will regrettably continue,'' Dr Debroy said.

The industry was of the view hat the charismatic leader had been able to a miracle of sorts by giving sops to the passengers -- no hike in second class fares, slashing of first AC and second AC fares and an introduction of 55 new trains -- by adopting a well-known principle -- increase volumes but to reduce unit costs.

India Inc. also complimented the Railway Minister for taking on headlong, the fierce competition from low-budget airlines, by bringing down fares for AC first class and second class.

''Bringing down the operating ratio to 83.7 percent this year is reflective of the financial soundness of the railways,'' CII President Y C Deveshwar said.

CII offered a host of suggestions for Mr Prasad -- introduction of a freight discount scheme, loyalty discount scheme and non-peak season incremental freight discount scheme.

Two other features of the budget which received universal acclamation from India Inc., related to breaking the monopoly of CONCOR and the proposed dedicated freight corridors on the Eastern and Western sector.

Referring to a growth in Railway finances from a mere Rs 250 crore in 2001 to Rs 11,000 crore in 2005, ASSOCHAM President Anil Agarwal found it heartening that the internal resources of the organisation had registered a robust growth. This meant less dependance on market borrowings as well as budgetary support.

FICCI President Saroj Poddar found merit in the budget as it sought to lower the turn a round time of the wagons and adding more coaches to the existing ones as well as introduction of new trains. ''Modernisation is the need of the hour,'' Mr Poddar quipped.

Captains of industry, however, appreciated the compulsions of Lalu in giving so much focus to the 'Aam Aadami'-- the ensuing state assembly elections and his own background of being a people's man.

UNI GS/RA SS PM1912

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