Presenting his third populist railway budget in succession, Railway Minister Lalu Prasad on Friday effected a steep reduction of air conditioned fares and proposed no increase in passenger fares or across the board freight rates but rationalised freight tariff that will bring down diesel and petrol transportation by eight per cent.
In a budget that comes ahead of Assembly elections in five states, he also announced introduction of fully air-conditioned Garib Rath (poor's chariot) on a pilot basis in which fares will be about 25 per cent lower than present AC-III tier fares.
Passenger tariff structure will be rationalised so that that the fares of AC first class and AC second class will be 11.5 times and 6.5 times the second-class fares, respectively.
The minister's generosity covered extension of 50 per cent concession in second class fares to sleeper class for farmers and milk producers for travel to institutes of national level for training.
Similarly, persons who have lost their limbs in accidents or otherwise will get 50 per cent concession in second class and sleeper class for travel to national level institutes for transplantation along with one attendant.
Prasad announced introduction of 150-km speed train, recently started between Delhi and Agra, on Delhi-Kanpur-Lucknow route.
Renewal period of monthly season tickets (MSTs) has been increased from three days to ten days and the superfast charges applicable on MSTs and quarterly season tickets (QSTs) reduced to one-fourth of the current level.
Tariff fixation mechanism for military traffic to be rationalised and simplified.
Prasad said there will be no across the board increase in freight rates and rationalisation of goods traffic will continue further.
The number of commodities groups will be reduced from 80 to 28. With lowering of the highest class to 220, freight rates of diesel and petrol will be less by 8 per cent.
Over the next three years, the highest class to be lowered below 200 and rates for the highest classification to be made less than double that of the lowest classification (except rates of some light commodities).
Announcing new freight schemes, Prasad said dynamic pricing policy for freight introduced during the current year would be extended also to passenger for peak and non-peak seasons, premium and non-premium services and for busy and non-busy routes.
Non-peak season incremental freight discount scheme has been launched with discounts up to 30 per cent during non-peak season and 20 per cent in the peak season with certain conditions on incremental freight in the empty flow direction.
Loyalty discount scheme to encourage transportation of cement and iron and steel by rail will be launched along with long-term freight discount scheme to attract new customers and new freight traffic, the minister said.
Mini rake and two-point rake scheme will be made available both in peak and non-peak season and a new freight forwarder scheme for freight of over 700 km will be launched.
Presenting the budget estimates for 2006-07, Prasad announced a freight loading target at 726 million tonnes and freight output at 479 btkms.
Revenues in freight, passenger, other coaching and earning segments to be Rs 40,320 crore, Rs 16,800 crore, Rs 1,400 crore and Rs 1,308 crore, respectively.
Gross traffic receipts (GTRs) have been estimated at Rs 59,978 crore and ordinary working expenses at Rs 38,300 crore.
Appropriation to Pension Fund and Depreciation Reserve Fund will be Rs 7,790 crore and Rs 4,307 crore respectively, Prasad said.
Internal generation before dividend has been estimated at Rs 14,293 crore, while operating ratio is expected to be 84.3 per cent in 2006-07.
Reviewing the performance and revised estimates of 2005-06, Prasad said there has been a record-breaking performance in the first nine months with growth in freight loading and revenues pegged at 10 per cent and over 18 per cent, respectively.
Loading target has been increased from 635 million tonnes to 668 million tonnes and freight revenue target increased from Rs 33,480 crore to Rs 36,490 crore.
The Tenth Plan targets of 624 million tonnes and 396 billion tonnes to be surpassed one year in advance, he said.
Earnings from passenger, other and sundry other earnings are up by 7, 19 and 56 per cent respectively over the previous year.
Gross traffic revenues are expected to be Rs 54,600 crore and are 16 per cent higher than the previous year.
Ordinary working expenses during the current year are expected to go up by Rs 1,200 crore.
With operating ratio expected at 83.7 per cent, the likely end-year fund balance will be Rs 11,280 crore.
The minister also announced introduction of 55 pairs of new trains, 37 pairs of extension in services, 12 pairs in increase in frequency and two pairs of re-routing.
The budget contained a proposal for construction of a dedicated multi-modal high-axil load freight corridor with computerised control on western and eastern routes at a cost of Rs 22,000 crore.
The plan outlay for 2006-07 has been pegged at Rs 23,475 crore, claimed to be the largest ever so far. Of this, Rs 7,511 crore will be support from general exchequer, Rs 10,794 crore through internally-generated resources and Rs 5,170 crore through extra budgetary resources.