A Ghalla Bhansali Initiative

February 26, 2013

Rail Budget 2013-14: Highlights

Union Railway Minister Pawan Bansal presented the Railway Budget 2013-

14 in the Lok Sabha today. He is the first Congress Minister to present Railway budget in 17 years. He proposed the introduction of improved and safer facilities while delivering the Railway Budget for 2013-2014. Bansal underlined the need for the Indian Railways to remain financially sustainable, especially at times when resources are scarce and losses on train operations continue to mount.

hike the reservation fee for superfast trains and the tatkal charges. He called for a paradigm shift on tariff and freight policy and the faster expansion of the rail network. Here is a look at other provisions introduced by the Rail Minister in his Budget. Budget Estimates 2013-14: Freight loading of 1047 MT, 40 MT more than 2012-13. Passenger growth - 5.2%.

Bansal did not announce a hike in passenger fares, but however did propose to

Gross Traffic Receipts - ` 1,43,742 cr i.e. an increase of 18,062 cr over RE, 201213. Ordinary Working Expenses - `96,500 cr. Appropriation to DRF at `7,500 cr and to Pension Fund at `22,000 cr. Dividend payment estimated at `6,249 cr. Operating Ratio to be 87.8%. Fund Balances to exceed `12,000 cr
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February 26, 2013

Annual Plan 2013-14: Highest ever plan outlay of `63363 cr. o Gross Budgetary Support - `26,000 cr o Railway Safety Fund - `2,000 cr o Internal Resources - ` 14,260 cr. o EBR - Market Borrowing - `15,103 cr; o EBR - PPP - `6,000 cr. 500 km new lines, 750 km doubling, 450 km gauge conversion targeted in 2013-14.

Financial Performance 2012-13: Loading target revised to 1007 MT against 1025 MT in BE. Gross Traffic Receipts fixed at ` 1,25,680 cr in RE, short by `6,872 cr over Budget Estimates.

Ordinary Working Expenses retained at BE level of ` 84,400 cr; pension payments increased by `1,500 cr to `20,000 cr.

Dividend liability to government to be fully discharged. Excess of ` 10,409 cr as against the budget amount of `15,557 cr. Loan of `3,000 cr taken in 2011-12 fully repaid along with interest. Operating Ratio of 88.8% as compared to 94.9% in 2011-12.

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February 26, 2013

Fares: No hike in passenger fares. Propose hike in reservation fee, tatkal charge.

Freight: Average hike in freight below 5% on fuel price hike Fuel-linked adjustment to raise freight by avg 5% Scaled down FY13 freight target due to econ slowdown 1,500 km to be awarded for dedicated freight corridor FY14 FY14 freight loading estimated 1,007 mln tn To enter 1 bln tn freight carrying club Propose fuel adjusted freight rate increase from Apr 1 To have dynamic fuel adjustment charges for freight tariff

New Routes, Trains: To launch 26 new passenger trains To launch 67 new express trains Working on new railway line in Manipur To introduce AC coach in Mumbai suburban network in FY14 1st AC rake to be introduced in Mumbai in FY14

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February 26, 2013

Infrastructure: 1 trln rupees investment envisaged in PPP route 12th plan Land buy for 2,800 km for east, west freight corridor over Plan rail-related electronic technology institute at Nagpur To set up training institute in Nagpur To spend 3 bln rupees for staff quarters via PPP route Envisaged 80 bln rupees for iron ore mine connectivity work To energise 1,000 level crossings with solar power Setting up 75 MW windmill plants To set up rail energy management company 90 bln rupee envisaged for port, mine connectivity projects 40 bln rupees envisaged for coal mine connectivity projects To set up coach manufacturing facility at Sonepat, Haryana To set up equipment signalling plant at Chandigarh via PPP Wagon maintenance workshop at Kalahandi, Odisha To marginally exceed 700 km FY13 track doubling target Electrification of 1,200 km in FY13 800 km gauge conversion target scaled down to 575 km 700 km new lines target scaled down to 470 km To lay 500 km of new rail lines FY14
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February 26, 2013

Safety, Modernization: To make 10-year corporate plan for rail safety Plan to introduce corporate safety plan for 10 yrs from 2014 Need support from central road fund to cut level crossings Train protection warning system to be implemented 10,797 level crossings to be eliminated in 12th plan Won't add new level crossings Safety fund provisioning inadequate 40% of rail accidents, 60% of fatalities at level crossings To work towards zero-accident situation

General: Did not present supplementary demand 1st time in 25 yrs Total rise in railway fuel bill since Jan at 51 bln rupee Diesel price hikes since Jan added 33 bln rupee to fuel bill 347 priority projects to receive committed funding To set up new debt service fund Independent rail rate body at inter-ministerial talks stage Losses on train ops continue to mount Steep rise in primary cost met by rise in freight cost Share from central road fund 11 bln rupee vs 50 bln needed
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February 26, 2013

Number of trains up from 8,897 in 2001 to 12,335 now Overwhelmed by demand for new trains, new projects Fell short on track doubling, conversion aims in 11th Plan Raising 950 bln rupee for next 4 yrs needs paradigm shift Arunachal Pradesh brought under RAIL network To fill up 152,000 railway job vacancies

Conclusion: was a vital organisation integrating the nation from Baramulla in the north to Kanyamumari in the south. The growth of Indian Railways is inextricably linked with the growth of the country. It must remain financially sustainable. Resources generated must be ploughed back. Railways remained the single most important catalyst in India's growth story and

passenger fares further, he may have fuelled inflationary concerns by raising tariff

While Pawan Bansal spared the cattle class of the Indian Railways by not hiking

rates in the form of a diesel adjustment charge on fuel. So far, there was speculation that Bansal would be forced to raise passenger fares as the benefits of the 21 percent hike in January was offset by the freeing up of diesel prices. However, it seems the 5 percent on an average due to dynamic fuel price adjustment.

onus has fallen on cargo rather than the aam admi as freight tariffs will rise by around

A Ghalla Bhansali Initiative

February 26, 2013 Research Analyst Rajesh Dedhia

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