Report on Railway Budget

24/02/2010

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RAIL BUDGET

Indian Railway Minister, Mamata Banerjee presented the Railway Budget for the
financial year 2011 in Parliament today. Banerjee has chalked out an ambitious plan
with an aim to raise Rs 10,000-20,000 crore in FY11 alone with a promise to introduce a
10-year plan "Vision 2020" which would highlight the course to be chalked out for the
railways for the next 10 years.

Mamata Banerjee delivered a Rail Budget that was high on both populism and vision. In
her second Rail Budget, the minister left passenger fares untouched, and contrary to
expectations, there were no hikes in freight tariffs either. In fact, the minister actually
slashed the freight rate on food grains and kerosene by Rs 100 per wagon. The move
indicates that there will be no inflationary pressure on cement and steel companies.

The minister announced that the railways aimed to add 1,000 kilometers of railway line
this year even as the average yearly addition over the last 58 years stood at just 180
kilometers. Banerjee also proposed to set up six bottling plants through the PPP route
with the mandate that bottled fresh water will be provided at stations at much cheaper
rates. Initiatives like SMS updates on reservation status, setting up of global-standard
double-decker trains between Delhi and Kolkata and radio frequency technology to
track iron ore and coal wagons had been undertaken, she said.

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Key Highlights
Vision 2020
Banerjee also spoke about a whitepaper, Vision 2020, she had submitted to Parliament.
The document, she said, outlined a 10-year plan over how she saw railways in the
country to pan out.

No privatization
While emphasizing on the need for public-private partnerships (PPPs) in Indian
Railways but said complete privatization would not take place.

Rail stocks take a plunge

Rail stocks plunged post Rail Budget. Kalindee Rail Nirman (Engineers), Kernex
Microsystems, Titagarh Wagons, Stone India and Hind Rectifiers were down 4-7%.

Food grain prices to ease

With food prices up 18%, the fastest pace in 11 years, railway's plan to cut freight rate
slightly for food grains is unlikely to bring down prices sharply, but will help in price
moderation. Indian railway is cutting freight rates for the transport of food grains by Rs
100 per wagon, the railways minister said on Wednesday.

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Others
To come out with 10-year plan 'Vision 2020'
See 890 million tonne freight loading during FY10
To beat FY10 freight target by 8 million tonne
FY10 revised estimate on gross earning at Rs 88,200 crore
Rs 6,490 crore net revenue revised estimate for FY10
Non-core business revenue seen at Rs 1,000 crore
Plan to raise Rs 10,000-20,000 crore in FY11
FY11 freight loading aim at 944 million tonne
FY11 gross traffic receipts at Rs 94,800 crore
FY11 working spend seen at Rs 87,100 crore
See FY11 dividend liability at Rs 6,600 crore
FY11 operating ratio seen at 93.2
FY11 new line allocation cost at Rs 4,400 crore
FY11 gross budgetary support seen at Rs 15,800 crore
To borrow Rs 9,120 crore this fiscal
117 new trains to be flagged off by March 31
Rs 1,300 crore for passenger amenities
E-ticketing mobile vans at hospitals, universities
To run 101 new suburban trains in Mumbai
To introduce 54 new trains in FY11
Service charge on AC class cut to Rs 20 From Rs 40
To extend routes of 21 trains
To launch tourist trains on 16 routes

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To launch 10 more duranto trains

Golden Rail Corridor project announced
Funding for metro rail projects increased by 5%
Time for business partnership with Railways has come
RFID technology to be used in freight transport
To acquire 80,000 new wagons
To set up more freight corridors
To set up 10 auto ancillary hubs In PPP model
5 new coach factories to be set up
Diesel plant in Bengal if land available
Railway research centre in Kharagpur
Design testing unit to be set up in Bangalore

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