Faced with the uphill task of shoring up finances, the Railways is looking towards the government to cover part of the losses it will suffer this fiscal year if the proposed hikes in fare and freight rates are not implemented.
While officially the Railways ministry has said the decision of hike would be taken by Prime Minister Narendra Modi and the Cabinet, sources said in the pre-budget meeting with Finance Minister Arun Jaitley on Tuesday, Railway Minister Sadananda Gowda made a case for the operational need for the hike.
It is learnt that in the event that the government is unable to give the green signal for the hike for now, the other option the Railway Minister has discussed is the government bearing the losses and an amount of Rs 10,000 crore over and above the Gross Budgetary Support towards this has been mooted. A possible enhancement of the GBS itself has also been talked about.
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The logic presented to Gowda by the Railway Ministry bureaucracy is that the interim Rail Budget had already factored in the hike and prepared the budget accordingly. The decision could not be implemented because of the Model Code of Conduct and then again, it was put on hold even after being announced to the media on May 16 following intervention from former minister Mallikarjun Kharge.
The proposed hike is to the tune of 14.2 per cent in fares and 6.5 per cent in freight. Both include the fuel adjustment component.
Gowda will be holding a first-of-its kind meeting of general managers of zonal railways and production units as well as 69 divisional railway managers from across India on Thursday.
Heads of the Railways-owned PSUs have also been called. This is effectively the entire top brass of the Indian Railway, which will discuss a 10-point plan.
The plan calls for improving safety, punctuality, food, cleanliness, innovative methods of improving earnings, reduction in expenditure and speeding up decision making. Each official has been given four minutes to make his presentation on this agenda and the minister as well as the Railway board will spell out the new government’s focus areas.