Indian Railway Minister Suresh Prabhu will be facing an uphill task in balancing populism and economics while presenting the 2016 Railway Budget on Feb. 25, 2016..
Fares have not been raised for some time, and the pressure will be immense on the minister to increase it.
The biggest need is to refurbish the safety of the Railway network. On one hand revenue is falling and there is increasing need for funding different development work. Improvement of passenger amenities requires a massive input of finance which will demand a hike in fares.
However a sizeable portion of the ministry does not favor any such move, and the reasons are not very difficult to gauge, Elections in some states are round the corner, and a downside in crude prices will not justify any such move.
Check out the highlights of the Rail Budget 2016 here.
Railways have for long tried to offset passenger fares with a cross subsidy from the freight section. It has reached Rs 30,000 crores in the outgoing financial year.
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The implementation of the Seventh Pay Commission will lead to an additional burden of Rs. 32,000 crores. Earnings of Railways have declined to Rs 136,079.26 crore as against the target of Rs 141,416.05 crore during April-January period, a decrease of 3.77 percent.
There is little hope of substantial budgetary support from the Finance Ministry, and Railway will have to look for external sources. No new trains are expected to be announced as in the past year. New services could be launched to cater to local demands.
What to expect:
Railways are also expected to offer sops to attract freight from road to rail. Premium high-speed parcel trains are also expected to be announced in the budget.
The budget will also see the launch of AC suburban trains in Mumbai, which will be replicated in other areas as well. The fare of AC suburban service will be higher than the regular local train.
The Railway Minister will be tabling the Railway Budget 2016 at 12 Noon. It will be broadcast live on major State and Private News channels.
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