Railway Budget 2012-13: Can Dinesh Trivedi Balance Financial Woes Without Raising Fares?

Railway Budget 2012-13: Challenges and Expectations

With passenger fares unlikely to be hiked, Railway Minister Dinesh Trivedi will today present his first railway budget for 2012-13 amid concerns over the financial health of the world's second-largest network.

A cash-strapped Indian Railways, which runs 10,500 trains and ferries 22 million passengers daily over 64,000 km of track, is looking at an earnings shortfall of Rs. 7,000 crore. Poor financial management has left the Indian Railways staring at an earnings shortfall despite gross budgetary support of Rs. 20,000 crore last year and a Rs. 3,000 crore loan approved by the finance ministry on February 6.

Passenger fares have been on a freeze since 2002-03 as Trinamool Congress chief Mamata Banerjee, a former railway minister, is opposed to hiking fares. In the process, the Railways has little money to expand the network. Trivedi is also a Trinamool leader.

As a matter of fact, the passenger fare hike is not required at all. They need to brainstorm and explore possibilities for cost control. Once, Lalu Prasad Yadav's innovative thinking escalated the profit of Railways by 30%. Companies can use the return goods train for shifting their materials instead of shuttling empty goods trains. If they wish, they can surely bridge the gap of the shortfall of Rs. 7,000 crore.