India Inc cheers rail budget

The industry associations have welcomed the Railway Budget, saying it will make the railways "a much more freight customer-friendly organisation".

The schemes to attract a greater share of freight through private-public partnership would allow industry to use the available railway infrastructure optimally, the chambers said.

The associations also welcomed the end of the monopoly of Container Corporation of India (Concor).

"Container movement has been growing at a rapid pace, as high as 17 per cent annually, and Concor was alone unable to satisfy the growing demands. The opening of container movement will attract private sector participation in a big way in freight-dedicated corridors," Sunil Kant Munjal, president, Confederation of Indian Industry, said.

CII also said the introduction of double-decker racks to move containers across the country would provide respite to industry. It also welcomed the proposed rationalisation in the goods tariffs from 4,000 commodity groups to 80.

CII, however, added that the Budget did not make any attempt to correct the cross subsidies, which is essential to put the railway's finance back on track.

"India has the highest freight rates in the world, which need to be brought down to make the country competitive. The Budget should have made some attempt to correct this anomaly," Munjal said.

Meanwhile, Federation of Indian Chambers of Commerce and Industry president Onkar S Kanwar said initiatives like wagon investment scheme would give dedicated rail users some certainty as regards to the availability of wagons.

The minister has provided for a tariff rebate and higher priority to the prospective participants in the scheme. Kanwar also welcomed the setting up of the Railway Land Development Authority for commercial exploitation of surplus railway land.

Assocham President MK Sanghi welcomed the allocation of Rs 24,000 crore for modernisation of railways. He also appreciated the initiative for regrouping the commodities to 80 instead of the existing over 4,000 commodities for tariff purposes.

"The proposal to develop a management information system through a data warehouse developed for unreserved ticketing system, passenger reservation system and freight operations information system on the Indian railways will also have positive impact," Sanghi said.

He, however, added that adequate measures have not been taken for mobilising resources for modernisation. Sanghi said the estimated gross tariff receipts at Rs 50,698 crore for 2005-06 would have yielded better results, had the ministry effected a considerable increase in freight charges.