BUDGET ESTIMATES, 2003-2004

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Part - II

82. Sir, I shall now deal with the Budget Estimates for 2003-2004.
83. The Railways are expecting to carry 540 million tonnes of revenue earnings originating traffic during 2003-2004, which is 25 million tonnes more than the traffic of 515 million tonnes likely to be lifted in the current year and this increase is higher than the average incremental freight achieved in the last few years. However, taking note of the prevailing trend in the economy and the various measures being taken by the Railways, this target is expected to be achieved. The originating passenger traffic is estimated to go up by about 3 per cent resulting in increase in earnings of 7 per cent over the Revised Estimates of the current year. The ‘Other Coaching’ earnings are expected to grow by 7 per cent. Sundry Other Earnings, for 2003-2004 have been estimated at Rs 990 cr, representing a growth rate of 5 per cent over the Revised Estimates of the current year.
84. On the basis of these assumptions, the Gross Traffic Receipts (GTR) are estimated at Rs 43,495 cr. These are Rs 2,628 cr higher than the Revised Estimates of the current financial year.
85. Railways' Ordinary Working Expenses estimated at Rs 32,460 cr are 7 per cent higher than the Revised Estimates of the current year. Appropriation to Pension Fund is placed at Rs 6,385 cr. Based upon the anticipated requirement for plan resources, a provision of Rs. 2005 cr has been made towards Appropriation to Depreciation Reserve Fund .
86. The total Working Expenses will, thus, amount to Rs 40,850 cr leading to the Net Traffic Receipts of Rs 2,645 cr. Net Miscellaneous Receipts are estimated at Rs 888 cr, which also take into account the amount likely to be collected through levy of surcharge on passenger fares for being appropriated to the Special Railway Safety Fund. Thus, the Net Revenue works out to Rs 3,533 cr.
87. A memorandum on the rate of dividend payable to General Revenues has been submitted to the Railway Convention Committee. Meanwhile, dividend for 2003-2004, has been provided at the same rate as adopted for 2002-2003. On this basis, dividend liability for 2003-2004 works out to Rs 2,930 cr. Along with certain other dues, an amount of Rs 2,978 cr becomes payable to the General Revenues. This liability will be discharged in full.
88. The above projections are expected to yield funds sufficient to meet the requirement of the Plan outlay for the year, from the internal resources.
89. With a view to make the Freight rates and Passenger fares competitive and increase Railways’ share in transport sector, it is necessary to continue the process of rationalisation and re-balancing of Tariffs. In order to attract more traffic to rail, I am proposing certain other measures and reforms.

 

Freight Services

90. Sir, for year 2002-2003 I did not make any across-the-board increase in freight rates. For the year 2003-2004, I do not propose any increase in freight rates for any commodity.
91. While rationalising the freight structure, the total number of classes was reduced from 59 to 32 with Class-90 as the lowest class and Class-300 as the highest class. In freight structure so rationalised, the ratio between the highest and the lowest freight rate was reduced from 8.0 to 3.3. It is proposed to reduce further the band of freight rates through compaction in freight classification by lowering the highest class from Class-300 to Class-250. In the revised classification, the total number of classes will be reduced from 32 to 27 and the ratio between the freight rates for the highest and the lowest class will be further reduced from 3.3 to 2.8.
92. To make the freight rates competitive, it is proposed to reduce the classification of certain commodities where Railways are facing stiff competition due to high freight rates. The classification of Petrol for trainload movement is proposed to be reduced by three stages from Class-280 to Class-250, lowering the freight rates by 10.7 per cent. The classification of certain other commodities is proposed to be reduced by two stages. These commodities include High Speed Diesel Oil (HSD), Furnace Oil, Crude Oil, Naptha, Liquefied Petroleum Gas (LPG), Compressed Gases, Lubricating Oils, Iron & Steel, Pig Iron, Iron Scrap, Cement sheets, Petroleum Coke and Soda ash. Some of the liquid commodities, carried in tank wagons, namely Molasses, Bitumen, Refined vegetable oils (Div. A), and Sulphuric acid are also proposed to be charged two stages lower than their existing classes. The proposed reduction in freight rates due to lowering of classification by two stages will range from 5.3 per cent to 9.5 per cent. The classification of Cement, Clinker, Manganese Ore and Caustic Soda Liquid (in tank wagon) are proposed to be reduced by one stage, which will reduce the freight rates by around 3.7 per cent. Details of the re-classification of these commodities, along with the existing and proposed freight rates for selected distances, are given in the Memorandum Explaining the Budget Proposals for Adjustment in Freight Rates and Fares.
93. There are certain groups of commodities, which are assigned different classes based on their different physical forms such as lumps, powder etc. In order to initiate simplification in the classification of such groups of commodities, which are loadable upto the full carrying capacity of wagons, a single uniform class will be assigned for each such group. Iron Ore, in its different forms, such as lumps, powder, fines, pellets etc., which are currently classified from class-120 to class-125 would now be charged uniformally under class-120 for trainload. Similarly, other selected groups of commodities, namely Manganese Ore, Gypsum, Bauxite, Limestone & Dolomite, Soapstone and Chalk will be assigned a single uniform class for each group. The details of the existing and proposed classification of these groups of commodities are given in the Memorandum Explaining the Budget Proposals for Adjustment in Freight Rates and Fares.
94. In order to increase its share in transportation of Petroleum products, Railways are ready to consider long- term agreements with individual oil companies for further reduction in freight rates on sector-to-sector basis if guaranteed volumes of additional traffic are committed for rail movement.
95. With the liberalisation of Indian economy, the pattern of industrialisation is undergoing a significant change with production centres coming closer to the source of raw materials or consumption centres. The average distances over which some of the major commodities are moved by rail have been gradually declining and Railways have to take various measures to capture short lead traffic. In the Railway Budget 1999-2000, freight concession of 25% was granted to traffic booked for distances upto 50 km. as the minimum distance for charge is 100 km. This measure has shown positive results and generated additional revenue to the Railways. It is now proposed to rationalise the charging of freight for all traffic booked upto 100 km. through a scheme of graded concessions. Under this scheme, 50 per cent freight concession will be allowed for traffic booked upto 50 km. followed by 25 per cent concession from 51 km. to 75 km. and 10 per cent concession from 76 km. to 90 km. In the proposed rationalisation, the freight rate per tonne per kilometer for these distance slabs would be exactly the same.
96. The rail users have an option to pay freight charges either at the time of booking or at the time of delivery at destination station. Presently, if the freight is not paid at the time of booking, a ‘to-pay’ surcharge of 10 per cent on normal freight is levied for all commodities other than Coal. In the case of coal traffic, 15 per cent "to-pay" surcharge is levied. The rail users consider this surcharge excessive. Therefore, it is proposed to reduce the ‘to-pay’ surcharge from 15 per cent to 10 per cent for coal and 10 per cent to 5 per cent for all other commodities.
97. There are many commodities, which have a wagonload class only. It has been decided that any commodity, which has only a wagonload class, will be assigned a trainload class one stage lower than its wagonload class. As a result, the freight will get reduced by around 4.00 per cent to 5.26 per cent if such a commodity is now offered for trainload booking.
98. Freight movement on the Indian Railways is predominantly in the form of block rakes from one originating station to a single destination point. However, with a view to reduce the carrying cost of the customers, block rake movement from one originating station to two destination points close to each other and vice-a-versa is also being permitted. At present, such two-point block rakes enjoy the benefit of lower trainload rates only upto the common point of movement. It has been decided that two-point block rakes will now be granted the benefit of trainload rate for the entire distance of transportation.
99. At present, clubbing upto six consignments is permitted in a broad gauge 8-wheeler wagon. In order to provide rail transportation to a larger number of traders and retailers, it has been decided to allow clubbing upto twelve consignments, on payment of Rs 100 for every additional Railway Receipt.
100. The wages of the railway staff deployed in private sidings are being traditionally charged to the siding owners. In order to give relief to the siding owners, Zonal Railways will undertake a thorough review to reduce the cost of railway staff being charged to the private siding owners in a phased manner.
101. Siding owners generating freight earnings of more than Rs. 25 crore per annum from traffic originating from their sidings have been designated as Premier Customers of the railways. An incentive scheme for the Premier Customers to help them increase the rail share of transport is being introduced. Premier Customers would be granted a freight rebate of 2 per cent for every five crore rupees of net additional originating freight earnings over the previous financial year generated to the railways. The rebate under this scheme will be granted in addition to any other freight concession availed by them. However, this incentive scheme will be applicable to net additional originating freight earnings from commodities placed in Class-135 and above.

 

Passenger Services

102. Sir, this year I do not propose any increase in Passenger fares.
103. Last year, the fare structures of Mail/Express, Ordinary Passenger trains and Monthly Season Tickets (MST) were rationalised. This year, it is proposed to rationalise the fares of Rajdhani and Shatabdi Express trains. A separate fare structure for Rajdhani and Shatabdi Express trains was introduced in the year 1995-96 which does not have a fixed relationship with the fares of Mail/Express trains. It is now proposed to link the fares of Rajdhani and Shatabdi Express trains to the rationalised fare structure of Mail/Express trains, fixing the basic fare for each class of Rajdhani and Shatabdi Express trains 15 per cent higher than the fares of corresponding class of Superfast Mail/Express trains on a uniform basis. Charges for catering services, as per requirement of the journey, would be added to the basic fares. Sir, as a result of this rationalisation, the basic fares of different classes of Rajdhani and Shatabdi Express trains will be lower for most of the pairs of stations. In exceptional cases, fares may be marginally higher for a few pairs of stations in which case, the existing fares will apply. The details of the existing and proposed end-to-end fares for Rajdhani and Shatabdi Express trains are given in the Memorandum Explaining the Budget Proposals for Adjustment in Freight Rates and Fares.
104. I am glad to inform that all the sixteen Jan Shatabdi Express trains, announced during last year’s Railway Budget have been introduced. The fare structure for Jan Shatabdi Express trains was fixed 10% higher than the fares of Superfast Mail/Express trains. Additional charges for catering services were included in the ticket fare. To make Jan Shatabdi Express trains more popular, it is proposed to reduce the basic fare from the existing mark-up of 10% to 5% over the fares of corresponding class of Superfast Mail/Express trains and make the catering services optional on these trains.
105. In order to benefit the passengers and also to give competitive edge to rail travel, it is proposed to introduce the concept of reduced fares in selected trains during the non-peak period. As an experimental measure, 10 per cent reduction in the basic fares of AC First and AC 2-tier of all Rajdhani Express trains would be given for travel during the period from 15^th July to 15^th September this year.
106. At present, if a wait-listed passenger boards a Rajdhani or Shatabdi Express train, excess fare, equal to the ticket fare, is charged. It is felt that this penal charge needs a revision. It has been decided that the rules in respect of waitlisted passengers boarding Mail/Express trains will now be applicable to waitlisted passengers of Rajdhani, Shatabdi and Jan Shatabdi Express trains also.

 

Parcel and Luggage service

107. In order to simplify the booking procedure of Parcel and Luggage traffic and optimize the use of transport capacity available for carriage of parcels by different trains, it is proposed to rationalise the rate structure for booking of Parcel and Luggage traffic. At present, parcels are charged under seven different Scales based on the type of the commodity. It is proposed that all types of commodities, including Luggage, will now be charged uniformly at the same rate, under four Scales, depending on the type of service selected by the customer. The highest Scale-R, for Rajdhani service, will be applicable to all Rajdhani Express Trains. The next Scale-P will be for Premier service by certain notified Mail/Express trains. The next lower Scale-S, for Standard service, will apply to other Mail/Express, Shatabdi Express and Parcel Express trains. The lowest Scale-E will be for Economy service by Ordinary Passenger trains. In the rationalised structure, the number of Scales for charging of Parcel and Luggage traffic will be reduced from 7 to 4 and the ratio between the highest and the lowest rates will reduce from 8.7 to 6.2 Newspapers and Magazines will now be charged at the same rates under the lowest Scale-E by all trains. The rationalised rates for Parcel traffic under the new structure will be lower than the existing rates. The details of the existing and proposed rates for different commodities between a few selected pairs of stations are given in the Memorandum Explaining the Budget Proposals for Adjustment in Freight Rates and Fares.
108. All the above proposals will come into effect from 1.4.2003.
109. Sir, achievements of a vast organisation like Indian Railways reflect the sincerity and dedication of the railwaymen, who deserve appreciation. They will ever be ready to fulfil the public expectations and aspirations. I express my gratitude to respected Prime Minister for his continued encouragement and kind support and I firmly believe that Indian Railways would establish new dimensions of progress under his guidance. I also thank and express my gratitude to Hon'ble Finance Minister for giving adequate support to the Railways. I am confident that they would be obliging the Railways by providing additional funds generously in the coming year for accelerated execution of the Railway Projects. I thank Hon'ble Members for their support and suggestions and hope that they would continue the same in future too.
110. Sir, with these words I commend the Railway Budget 2003-2004 to the House.