Industry welcomes rail fare hike

March 14th, 2012 - 9:15 pm ICT by IANS  

New Delhi, March 14 (IANS) Terming it a practical budget, industry bodies Wednesday welcomed Railway Minister Dinesh Trivedi’s decision to hike passenger fares even as the issue triggered a controversy, with the Trinamool Congress demanding a roll-back.

The Trinamool opposed the hike, ranging from 2 paise to 30 paise, announced by Trivedi, who is from the same party.

Defending the hike, Trivedi said that it was needed to provide basic amenities and for the safety of passengers.

According to the Associated Chambers of Commerce and Industry of India (Assocham) the fare hike was inevitable due to high crude oil prices internationally and prevailing inflationary pressures.

While the Federation of Indian Chambers of Commerce and Industry (FICCI) said it was a bold step as passenger fares were not hiked since 2002-03, implementation of the steps proposed in the budget will remain a challenge.

“The railway budget for 2012-13 is an attempt to put the railways finances back on track through revenue mobilisation efforts. FICCI welcomes this effort, but believes that implementation should now be the top priority.”

FICCI also said that the hike in fares will reduce, even if marginally, the cross-subsidisation of passenger fares from freight while the much needed investment in infrastructure will result in safety, decongestion, capacity augmentation and modernization of the system.

Welcoming the heightened focus on safety and modernisation the Confederation of Indian Industry (CII) said the increase in fares after 10 years will impart greater flexibility for future requirements.

Assocham also said that adequate resources should have been mobilised through though the public-private-partnership model in tune with double digit GDP growth.

“The goal of the Vision 2020 Document could be a reality if public- private-partnership is seriously taken up for monetising huge chunks of land and properties in metros and elsewhere,” Assocham said.

FICCI also lauded the efforts to bring down the operating ratio from 95 percent to 74 percent in the terminal year of 12th Five Year Plan (2012-17).

On the downside, FICCI said, the budgeted growth in gross traffic receipts at 27.6 percent for the next fiscal is an ambitious target, given that the compounded annual growth rate (CAGR) in gross traffic receipts for the decade ending 2010-11 was only 10.4 percent.

“More importantly, the budgeted freight earnings target for next fiscal at 30.2 percent may be difficult to achieve (vis-a-vis CAGR at 10.3 percent for the last decade),” FICCI said.

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