Lalu's Budget Express to roll out on populist track

New Delhi: Railway Minister Lalu Prasad is all set to present a people-friendly Rail Budget on Tuesday.

After four Budgets – and the credit of affecting a drastic turnaround of the Railways – it seems to payback time for the turnaround artiste.

For starters, the good news is that passenger fares are unlikely to go up.

Expect a marginal fall in the AC-2 and AC-3 tier ticket prices and a substantial two to five per cent fall in general compartment rates

Several railway projects started by Nitish Kumar as the railway minister in Bihar might be in cold storage but that won’t stop Lalu from playing his brand of regional politics. So, expect at least four new railway lines in his home state and 13 new lines in all..

In fact, Lalu knows he can't really jazz up the Railway ledger this year when the burden of the Sixth Pay Commission is going to rest on his shoulders.

Finance Ministry has asked him to set aside at least Rs 9,000 crore for the pay hike.

But he is not passing on his wage bill to his clientele. The freight charges, like last year, will be rationalised.

But do not expect major freight rationalization. Much of that was done in the first two years of Lalu's tenure. There could be some tweaking to make the railways competitive vis-a-vis pipelines for petroleum product movement. But despite the reduction in freight classes and a lowering of rates, the Railways are earning tonne for tonne more through surcharges.

Lalu would be presenting his Budget with the confidence that the freight target of 785 million tonne will not only be achieved but also exceeded.

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This is in line with the growth of the Indian economy this year and a 40 per cent jump over freight carried when Lalu Yadav took over in 2004. The railways say they have sustained for the second year running, the arrest in erosion of market share in commodities, like steel to roadways.

They would have loaded half a million tonne more cement, if wagons did not have to be diverted to imported grain and fertiliser. With demand of 12,000 wagons and only 8,000 supplied, it is party time for wagon manufacturers.

Decoding Lalu’s plans

Passenger earnings this year are expected to increase by 14.5 per cent. This is still a losing sector though the railways are stuffing more people in airconditioned coaches to delightfully part them of their money.

But do not expect a fare hike. Railway finances have however improved. Only 80 paise per rupee earned is now spent, unlike a few years ago when this was as high as 95 paise. So, the year should end with a surplus of over Rs 21,000 crore. That should enable the railways to easily absorb the sixth pay commission tab.

But it cannot be business as usual and railways need to expand. The 11th plan size is Rs 2,50,000 crore. The gross budgetary support has decreased by half to 25%. The Railways say that funds are not a problem, project execution capability of contractors is.

Lalu's last lap will not be a lost lap He would like a monument to remember him by. So, expect an announcement on the Kolkata-Delhi freight corridor.

(With inputs from Vivian Fernandes and Mansi Sharma)