'Freight rates could have been cut'

RAILWAY BUDGET 2004-05/ REACTIONS: Modernisation drive hailed

Leading industry associations welcomed the Railway Budget 2004-2005 saying Railway Minister Lalu Prasad, has taken positive steps towards modernisation, replacement and renewal of railway assets and improvement in passenger amenities and infrastructure development.

The Confederation of Indian Industry (CII) welcomed the decision for maintaining status quo on the freight tariff.

The 10 per cent rebate on freight rate will encourage the heavy machinery consignment sector. The rationalisation of freight rates will sustain and enhance their competitiveness.

Considering an increase of 38.65 million tonnes in freight traffic over the last year, the minister could have reduced the rate to gain the lost share to the road traffic, which is becoming more competitive, CII president Sunil Kant Munjal said.

The introduction of roll-on roll-off (RORO) facility will also go a long way in facilitating transportation and easing of movements of goods.

Safety enhancement measures like anti-collision devices, manning of unmanned level crossings, track renewal and modernising of bridges are also positive steps towards modernisation.

Federation of Indian Chambers of Commerce and Industry (FICCI) president YK Modi welcomed the maintaining of operating expenses, providing better safety to passengers, initiating drives for cleanliness and introducing more passenger amenities.

The Budget's emphasis on IT and application of IT tools for the improvement of railways functioning and buying more wagons were also prudent moves, Ficci said.

The chamber hailed the introduction of more refrigerated capacities as it is essential for movement of vegetables and perishable agricultural commodities from production centres to the markets throughout the country.

The Associated Chambers of Commerce and Industry of India (Assocham) too complimented the railway minister for presenting the Budget proposals with a human face by introducing 15 more new trains to the existing railway network and also promising to make it user-friendly and accountable to the common masses.

Assocham President MK Sanghi appreciated the measures incorporated in the Budget for improved railway safety and its effective modernisation.

The chamber has also welcomed the concessions granted for war-widows and unemployed youth.

The chambers also pointed out the weak links in the Budget. CII said the Budget missed on structural reforms, introduction of high speed trains and rationalisation of lower and suburban fares, which are subsidised. The Budget also failed to take measures commercially exploit excess land for additional revenue generation.

Ficci suggested that cross subsidisation in the railway system should be made transparent and a review should be made to identify the loss making operations and control cost in these areas. This will help the railways to eliminate loss-making operations over a fixed timeframe.

Assocham also suggested the existing network of the railways in most of the metropolis of the country was overloaded.

So, the immediate requirement of the railways should be to create metro facilities in the upcoming large cities of the country on the lines of those where such facilities already exist.

It said as the concrete steps for generating additional resources for railways were not mentioned in the Budget proposals, the ministry's dependence on higher budgetary allocation will further enlarge.

Assocham added the budget had not illustrated as to how his ministry intends to generate resources to support the railway's proposed drive for adequate safety.

PHDCCI reacted critically to the railway Budget saying it had not done much to rise above the short-term focus in announcing new initiatives. Strategic measures to bypass the phase of historic railway decline and entry into a renewed growth phase are missing in the announced Budget.

PHDCCI president Ravi Wig regretted that Railway Budget lacked commercial orientation and did not include measures to improve the financial health of railways.

The budget did not talk about setting up of an independent regulator - Rail Tariff Regulatory Authority - to fix up rational railway fares both for passengers and freight.

The major focus of the Budget continues to be on adding more passenger trains without creating the required additional infrastructure. Also, little progress has been made with regard to track renewal and replacement of signals etc.

Funds allocated for the purpose are grossly inadequate to modernise railways which is important for safety of passengers and cargo, Wig said.