No hike in rail fares, freight rates
Railway Minister Suresh Prabhu on Thursday desisted from raising fares and freight rates in his second budget but promised to cut cost and exploit new sources of revenue beyond tariff as he announced three new superfast trains and completion of three freight corridors by 2019.
Presenting the Railway Budget for 2016-17 in Parliament, he said the guiding principles to keep the modernisation of world's fourth-largest network on track are new sources of revenue, expenditure optimization and new operating structure.
Thursday's announcements included India's first rail auto hub in Chennai, boost to e-catering, creation of dedicated north-south, east-west and east coast freight corridors by 2019; connectivity to North-East and Wi-Fi in railway stations.
Unlike last year when he tweaked freight rates to mop up an additional Rs 4,000 crore, Prabhu made no fresh changes either in passenger fares or freight rates.
Plan outlay for Railways has been put at Rs 1.21 lakh crore for 2016-17, up by about 20 per cent from the current year's estimated expenditure. Its focus was on completion of the ongoing projects rather than announcing new ones.
"These are challenging times, may be one of the toughest.
"We are faced with two headwinds, entirely beyond our control; tepid growth of our economy's core sectors due to international slowdown and the looming impact of the 7th Pay Commission and increased productivity bonus payouts," he said in his over an hour long speech.
Slowdown in growth of passenger and freight revenues has put pressure on the railways' finances and Prabhu said the railways would need to cut costs, grow its freight business which provides two-thirds of its revenue and target new sources of non-tariff revenue through measures such as redeveloping train stations.