Some hail rail budget, others call it populist

February 25th, 2011 - 6:01 pm ICT by IANS  

New Delhi, Feb 25 (IANS) The railway budget presented by Railway Minister Mamata Bannerjee Friday got a mixed reaction from industry groups and analysts with some giving it a thumbs up and others calling it populist.Sparing the passenger and industry from fare and freight hikes yet again, Banerjee presented the railway budget for 2011-12 with the investment of Rs.57,630 crore ($12.7 billion), 68 new trains and a vow to build a stronger railroad infrastructure based on the Vision 2020 document.

“The annual plan outlay at Rs.57,630 crore presents an opportunity for businesses to work closely with the railways. CII believes that public private partnership (PPP) is the most effective way forward,” Confederation of Indian Industry (CII) Director General Chandrajit Banerjee said.

From more money for safety and several industrial parks under the public-private model, to new coach factories and concessions for women and even journalists, Banerjee sought to address all constituencies, especially her poll-bound home state of West Bengal.

“It is heartening to see that 85 PPP proposals have been received and the government is setting up single-window system to take these forward,” said the Federation of Indian Chambers of Commerce and Industry (FICCI).

The railway ministry’s gross traffic receipts were expected to cross the Rs.100,000-crore ($22.5-billion) mark for the first time ever this fiscal, based on freight traffic projection of 993 million tonnes and passenger growth of 6.4 percent.

But not everybody appreciated Banerjee’s populist budget with analysts wondering how the minister would be able to implement all the schemes when her ministry may not have the funds to see them through.

“The budget is based on political considerations. There have been many welcome announcement made by the minister, but it would be interesting to see how she would be able to implement these, while the operating ratio is at a high of 92 percent,” Vishwas Udgirkar, senior director, Deloitte in India, told IANS.

“Not increasing the passenger and freight fares and increasing pay of employees, is unsustainable for the railways. It will weaken its position in a growing inflationary economy casting a doubt on its financial health and its ability to undertake so many new capital-intensive projects which were announced today,” Udgirkar added.

The latest rail budget also comes against the backdrop of the assembly elections in West Bengal, where Trinamool Congress, Mamata’s party, has set its eyes on forming the next government.

“The railway budget in a nutshell has much less to offer to the business sector as its focus is more on welfare of the public and employees,” Dilip Modi, president, Associated Chambers of Commerce and Industry of India (Assocham).

Indian Railways, the world’s second largest under a single management, has a network of 64,099 km to ferry as many as 19 million passengers on 7,000 trains daily from 6,906 stations. It also runs 4,000 freight trains to carry 850 million tonnes of cargo.

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