Railway Budget: PM & FM keep Laloo on track

Railway Minister Laloo Prasad Yadav’s big spending will come from the Rs 24,000-crore package that the Prime Minister had cleared earlier this month to modernise the Railways over a five-year period. Of that amount, Rs 5,000 crore could be spent this year and Yadav is expected to announce the running of two semi-high speed trains and a dedicated track for a high speed train.

Other than that, no major new project is likely to be floated. ‘‘Of the total outlay for projects, which is to the tune of Rs 3,000 crore, new projects are not likely to exceed Rs 200-300 crore,’’ said a senior official.

This is not because the Railway Minister has suddenly become tight-fisted, but more because fiscal disciplinarians including the Prime Minister himself along with Finance Minister P Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia have been keeping a close watch on the exercise.

The total budgetary outlay is expected to be around Rs 15,000 crore. Yadav did not resist too much since he got his primary wish, which was that passenger fares not be touched. The official said that even the PMO was not too keen to raise fares since the economy, overall had been robust. ‘‘Moreover, there is tough competition from low air fares. Even though there was no hike in passenger fares last year, earnings still saw a four per cent increase,’’ he said. That was mainly because the number of travellers went up eight per cent.

The increase in diesel and steel prices had made it easier to raise freight rates. ‘‘The road sector has been hit and the demand for transport by rail has gone up. It is more than the Railways can cope with. In the scenario they can afford to increase the freight rates,’’ he added.

Sources said that Yadav agreed quickly to the suggestions made by PMO. ‘‘The senior officials have been carrying the files and proposals to Laloo at 1, Anne Marg, Chief Minister’s residence in Patna. Most of them are being returned, marked either ‘Anumodit’ (approved) or ‘Niyamanusar’ (according to rules),’’ an official said.

In tune with the new reformist thinking, no new mega projects will be announced and the ministry will not pour funds into workshops, hospitals and schools — activities considered ‘‘non-core’’ for the Railways.