Trivedi to present Rail Budget, fare 'hike' likely

New Delhi: It's the D-day and all eyes will be on Union Minister Dinesh Trivedi who will present the Railway Budget 2012 in Parliament. Sources say that the government is likely to impose a safety cess, although it will not be labelled a fare hike. Sources add that there is a possibility of an additional surcharge, called the Union government development surcharge.

However, the ministry is not likely to announce many new trains this year. A new premium scheme on reservation for a confirmed berth is also likely.

The emphasis, reportedly, will be on modernisation, infrastructural overhaul and on a dedicated freight corridor. Sam Pitroda's recommendations and the Kakodkar report are likely to be a part of the budget document.

Railway Board Chairman Vinay Mittal has said that a fare hike will bolster the railway finances only up to a limited extent. "The urgent need is to consolidate rather than expand," he says.

When asked if the current model of railways is a financially viable model, he said, "Trains run but we don't earn revenue because they are necessary."

"We fulfill a huge social responsibility. There are still areas in the country where people have not seen train in their entire life. There is a huge social cost," he added.

He further said, "There are four to five sources. One is a gross budgetary support. The government gives money. We have to generate our own resources as well. How do we generate through freight and fare and PPP? You have to increase the capacity."

"Even if you have a fare hike, the question is, how much can you do? The poorest of the poor have a certain affordability... and the government has a duty towards them."

But the Railways continues to announce new trains and projects are being distributed. When asked where will the money for those projects come from, the Railway Board chairman said the ministry has been very "circumspect this time" as far as the projects are concerned. "We need to consolidate rather than expand," he said.

Railways spend 60 per cent of the money on salaries and pension while 20 per cent is spent on fuel. Interest and other costs account for 10 per cent. The remaining 10 per is available for investment/renewal.