Prabhu raises the curtain of Jaitley's budget; wait and watch moment for India Inc

The much anticipated Railway Budget will get announced on Thursday at 12.00 pm in the Lok Sabha by Railway Minister Suresh Prabhu, which will be his second budget. Every railway budget faces a dilemma of increasing or decreasing railway prices. So what can happen this year related to rail budget and how railway ministry is looking into increasing revenue of railway?, is what everyone is waiting for.

Suresh Prabhu is facing a dilemma on whether to raise fares and freight rates as railway finances have come under tremendous strain. While the falling revenue collection and increasing demand for funding various capacity augmentation projects as well as the requirement for improving passenger services demands hiking up of fares, such a move at this juncture will not be a very good step as elections are round the corner in four states and diesel price is on the downslide. 

Further looking into revenue of railway, the ministry has already decided to run as many special trains as possible on higher fares along popular routes, catering to the growing demand during festive season, an indirect way of hiking fares. 

With this Indian Railways are firming up proposals to add four more dedicated freight corridors to increase its share in the freight pie, and divert loadings from roads to rail –this proposal is likely to be firmed up in the Rail Budget. Indian Railways’ loading share has come down to 36 per cent at present as a chunk of it has been shifted to roads, eventually causing a sharp fall in its freight earnings. 

Attempts have been made to increase the rail share in loadings through various measures and DFC is one such step in that direction. Currently, Indian Railways have undertaken Rs 81,459 cr projects to develop 3,342 km track comprising Eastern and Western Dedicated Freight Corridor (DFC) and and as per the plan, four more corridors will be constructed to ensure faster movement of goods.

Dedicated Freight Corridor Corporation was set up by Railways in 2006 to undertake planning and development, mobilization of financial resources and construction, maintenance and operation of the Dedicated Freight Corridors.