Railway Budget 2008

NEW DELHI: Setting the tone for an ‘Election Budget’, railway minister Lalu Prasad is likely to reduce both passenger fares and freight rates, riding a strong revenue growth and reduced operational costs. Rail fares are likely to be cut by 3% to 5% while freight rates for petroleum, steel and iron ore may come down by 4% to 5% due to reclassification of goods. Since this will be the last full-fledged Railway Budget before the general elections, scheduled for next year, the railway minister is expected to go all out with populist measures, ministry sources said. According to officials at the Rail Bhawan, there will be no deviation from the trend of not hiking freight and passenger rates as the Railways is right on track to meet the twin objectives of reducing operational cost and increasing revenues. Between April 2007 and January 2008, earnings from freight and passenger traffic have grown 11% and 14%, respectively, giving enough cushion for Mr Lalu Prasad to cut rates. The turnaround time of most trains has been reduced by using the same coaches in more than one sector. The strategy has helped the Railways increase profit without hiking passenger fares or freight rates. A possible cut in passenger fares is likely to cover all categories while short-distance travel charges may see some rationalisation, the sources said.