Industry welcomes Rail Budget, but criticises freight rate hike

Sanjeev Sharma

Tribune News Service

New Delhi, February 26

While India Inc has lauded the Railway Budget for its forward looking approach, it criticised the hike in freight charges, saying it will hurt the manufacturing sector.

Ratings agency India Ratings has raised questions on the numbers in the Budget and called them optimistic. It said passenger earning growth target is optimistic in the wake of no increase in passenger fare. The passenger earning growth in FY15 was achieved on the back of fare and tariff revision in June 2014. Even the freight traffic target at a time of sluggish domestic and global economic activity appears to be optimistic, it said.

Analysts also commended the Budget as the focus is more on implementation and improving the service quality rather than on big bang announcements.

Dipen Shah, Head-Private Client Group Research, Kotak Securities, said the focus is more on implementation and improving the service quality rather than on big bang announcements. Focus is also on commercial viability as much as it is on social welfare.

“We believe that, efficient execution of these initiatives will indeed improve the passenger revenues while also attracting more freight traffic to Railways. Change in freight fares seems cosmetic in nature, no change in passenger fare is a welcome move, given fuel cost has come down significantly over the period”, he added.

While welcoming the overall direction, industry has slammed the hike in freight charges which will hurt manufacturing.

Ravi Uppal, MD & Group CEO, JSPL, said on the downside the 6.30% hike in freight rates for coal will dent a range of industries and is also out of whack with the Make in India spirit. Along with the 0.8% hike in steel freight, this is a double whammy that could have been avoided, he added.

Chandrajit Banerjee, Director-General, CII, said the Railway Minister has presented a comprehensive and reform-oriented Budget, with issues of contemporary relevance being addressed in a pragmatic and result-oriented manner.

However, implementation remains the key. FICCI secretary-general Didar Singh said, “It is a forward-looking, pragmatic and strategy-oriented budget with an innovative approach. We are confident the proposed measures and initiatives, if executed and implemented effectively, will go a long way to restore the prime place for Railways in our national economy”.

PHD Chamber of Commerce and Industry president Alok Shriram has described the Railways Budget as the most pragmatic as it focuses on delivering a sustained and measurable improvement in customer experience, capacity expansion of passenger and freight through network expansion and proposed action plan for the next five years.

Sunil Kant Munjal, past president, CII, said a revamping of PPP cell to protect the interests of the private sector, comprehensive policy for tapping the latent advertisement potential, digital mapping of land records, policy for utilisation of rail land, creation of rail research centres, among others are the other breakthrough ideas for the rail sector. This would lead to greater efficiency and result in the Railways being the preferred mode of transport for passengers as well as for goods, as it should be in a country like India, he added.