Wednesday, Nov 26, 2014

UPA factored in fare hike in interim Railway Budget, but did not say so in Parliament

Railways Minister Sadananda Gowda said, “I am merely implementing the decision taken by the previous government.” Railways Minister Sadananda Gowda said, “I am merely implementing the decision taken by the previous government.”
Written by Avishek G Dastidar | New Delhi | Posted: June 22, 2014 1:43 am | Updated: June 22, 2014 10:53 am

The UPA’s weakness on reforms is demonstrated in the manner in which it tried to effect the critical hike in railway fares: raising them by stealth without actually talking about it in Parliament.

On Friday, hours after the Narendra Modi government took the first of the “tough decisions” that the Prime Minister had spoken of earlier, Railways Minister Sadananda Gowda said, “I am merely implementing the decision taken by the previous government.”

Gowda’s predecessor Mallikarjun Kharge had built the anticipated mop-up from the raised fares into the interim budget accounting for this financial year. But he did not mention in his speech that the hikes would come in a few months, and that the political green signal for the reform had already been received.

“The decision to not spell out the hike was a political one. Budget documents tabled in Parliament had all the  calculations mentioned in them,” Arunendra Kumar, Chairman, Railway Board, told The Sunday Express.

The Budget’s Statement of Revenue Receipts and Expenditure shows that for 2014-15, the Railways projected earnings of Rs 1,60,775 crore, which was Rs 20,000 crore more than last fiscal’s estimates.

From carrying passengers alone, it projected an earning of around Rs 8,000 crore more than the last fiscal, to reach a figure of Rs 45,255 crore, despite falling short of last Budget’s estimates by Rs 4,700 crore in the financial year ended March 31, 2014.

According to the Railway Board, Friday’s 14.2 per cent increase in passenger fares, along with the 6.5 per cent increase in freight rates, is expected to generate an extra Rs 9,000-10,000 crore this financial year. This money is not over and above the budget estimates, but is a component of the estimates.

Notably, since last year, the number of passenger bookings has seen a decline, so in the absence of the real reason being spelt out, such projections were at that time described as “optimistic”.

In the evening of February 13, the day of the interim rail budget, asked about the “unusual” increase in its projections for the next fiscal, Railway Board chairman Arunendra Kumar had told The Indian Express: “We believe the economy to look up next year and business to pick up, going by trends of the last three months. The projections about earnings are hence the way they are.”

On Saturday, Kumar said, “Budget is prepared for the whole year. Everything is mentioned. The increase in earnings was factored into it when presented in Parliament, only the hike was to be implemented in May. Thanks to the Model Code of Conduct it could not be done before May 16. Around continued…

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