Financial Daily from THE HINDU group of publications
Wednesday, Jan 16, 2002
Financial Daily from THE HINDU group of publications Wednesday, Jan 16, 2002 |
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Railway Budget Logistics - Railways Modest hike in rail fares likely Hema Ramakrishnan
NEW DELHI, Jan. 15 A MODEST hike in rail passenger fares may be on the cards in the Rail Budget. The Railway Ministry on Tuesday made it clear to the Finance Ministry that it would be ``tough'' to impose a substantial hike in rail fares at one go to eliminate the level of cross-subsidisation of passenger fares by freight rates, said official sources. At a pre-Budget meeting between the Finance Minister, Mr Yashwant Sinha, and the Railway Minister, Mr Nitish Kumar, the Finance Ministry pushed for reforms in the Railways based on the recommendations of the Rakesh Mohan Committee. ``The Railway Ministry has been asked to spell out the broad direction of reforms that it plans to undertake in the ensuing Rail Budget," officials said. The Rakesh Mohan Committee had mooted a 10 per cent hike per annum in second class sleeper fares and an 8 per cent hike in second class ordinary fares for about five years along with a 1-2 per cent hike in upper class fares. The Railway Ministry is, however, in favour of staggering the hikes over a longer period. The Finance Ministry also made out a case for adopting a high growth path model which would require investments of the order of Rs 14,000 crore to Rs 15,000 crore per annum from 2002 to 2006, around Rs 12,500 crore per annum from 2007 to 2011 and around Rs 13,500 crore per annum from 2012 to 2016. Service tax: Mr Nitish Kumar said that his Ministry was opposed to the levy of a 5 per cent service tax on the Railways as it would adversely impact the latter's internal resource generation. The issue came up during the pre-Budget discussions with the Finance Ministry, Mr Nitish Kumar told presspersons. He added that the Railways sought a higher budgetary support to finance investment plans for the ensuing fiscal. The suggestion to bring Railways under the ambit of service tax was made by the G.C. Srivastava Committee. The panel had held that services of which are of national characteristic including the Railways should be taxed only by the Centre.
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