Rates intact, volume growth seen

RAILWAY BUDGET 2004-05

Railway Minister Lalu Prasad has kept freight rates intact, and projected a 4.13 per cent increase in volumes to 580 million tonnes during the current fiscal. The growth is, however, lower than the 7.45 per cent growth achieved during 2003-04.

The minister also projected a 3.79 per cent growth in freight earnings to Rs 28,745 crore during 2004-05 from Rs 27,695 crore earned by in the last fiscal.

In his maiden Railway Budget, presented in the Lok Sabha today, Prasad proposed to generate an additional revenue of Rs 50 crore by effecting a 7-10 per cent hike in parcel rates across categories. The number of categories for booking parcels is also proposed to be reduced from four to three.

Prasad has provided a 10 per cent rebate to customers transporting heavy machinery in special wagons owned by them. The rebate is targeted at those transporting heavy equipment for thermal power stations. Also, technical staff escorting the consignments would be permitted to travel free.

The commodity-wise break-up of freight earnings shows that freight earnings are heavily dependent on coal and iron ore loadings. According to the Budget Estimate for this fiscal, earnings from coal at Rs 11,940 crore account for 42 per cent of the total earnings.

However, in volumes terms, traffic is expected to go up 6 per cent only. Earnings from iron ore for exports is expected to increase 39 per cent to Rs 1,097 from Rs 792 crore.

Earnings from foodgrains and fertilisers, which fall in the subsidised category, is expected to drop 3.3 per cent from Rs 4,602 crore in 2003-04 to Rs 4,448 crore this fiscal.

The minister also introduced various customer-friendly measures to sustain and improve the Railways' marketshare in transportation. An engine-on-load (EOL) scheme would be introduced to ensure faster release and better availability of wagons, he said.

Under this scheme, even though engines will wait during the loading and unloading of wagons, the free time available to customers for this will be lower than at present. The EOL customer will be exempted from paying engine hire charges.

Prasad's proposal for a 10 per cent freight rebate on transportation of heavy machinery has failed to enthuse industry, as such consignments account for a very small part of machinery freight.