Rail Budget 2013: Marginal hike in freight rates likely

Indian Railways plans a marginal hike in freight rate in the Rail Budget 2013-14 with a view to easing the additional pressure on the national transporter due to diesel price increase.

Barring essential commodities like food grains, pulses, salt, onion, potato, sugar, vanaspati, jaggery and fodder, a marginal revision is under consideration for other goods such as cement, iron ore and coal, sources said.

Railways had hiked the freight rate by about 20 per cent in March 6 last year.

Asked whether another round of freight hike might outprice railways from the market, the sources said "all pros and cons are being taken into consideration and efforts are under way to make our rate competitive."

Besides tweaking the freight rate, Railways is likely to announce a slew of schemes to attract goods loading business from the road sector.

Despite the freight hike in March 2012, the Railways is set to miss its freight earning target of Rs 89,339 crore this fiscal year as the total goods earnings for the last 10 months from April to January is Rs 70,067.36 crore.

Even the freight loading target of 1,025 million tonnes (mt) is likely to fall short by 15 mt as railways could transport only 927.90 mt during the last 10 months.

We would be able to carry maximum 1,010 mt goods in the current fiscal year, sources said.

The total passenger earnings for the period of 10 months have been Rs 25,924 crore, whereas the target for the current fiscal year is Rs 36,000 crore.

Attributing the sluggish growth in both passenger and freight earnings to the general economy slowdown, a railway official said steps were being taken to earn from non-traffic business like commercial utilisation of surplus land, station redevelopment, advertising and other avenues.

The revenue target of Rs 1.35 lakh crore for the current fiscal year is likely to be missed as the total earning of Railways for the 10 months from April, 2012, to January, 2013, has been Rs 1,01,223 crore, which means it needs to earn Rs 34,000 crore in the next two months to meet the target.

Railways annual plan size was slashed down to Rs 52,000 crore from Rs 60,000 crore for the year 2012-13 due to the overall cut in the expenditure.

Annual Plan size may touch Rs 70,000 crore in the next fiscal year as Railways is likely to get about Rs 30,000 crore as general budgetary support (GBS) in the Rail Budget 2013-14, sources said.

Railways, which had got Rs 24,000 crore in the last budget, sought Rs 38,000 crore from the government.

In the last Rail Budget, railways had predicted its operating ratio to be 84.9 per cent, whereas at present, its operating ratio is hovering around an unhealthy 90 per cent.

Operating ratio is defined as a company's operating expenses as a percentage of revenue.