India pledges more comfort on creaking rail network

Railway minister announces $11.7 bln budget for 2013-14

NEW DELHI, Feb 26, (AFP): India on Tuesday pledged better catering, comfort and cleanliness as part of a $11.7-billion budget for Asia’s oldest rail network along with steps to help stop trains mowing down people and elephants.

At the same time, Railway Minister Pawan Kumar Bansal — setting the stage for what is expected to be a belt-tightening national budget on Friday — hiked rail freight rates by around five percent.

He also reduced the annual rate of increase in federal spending on the railway to eight percent from the previous year’s 20 percent rise and insisted that the sprawling network must be made “financially sustainable”.

“Austerity and economy in expenditure will be observed,” Bansal promised in presenting the railway budget to March 2014.

The budget for the railways — India’s main long-distance transport despite competition from roads and airlines — is presented separately due to big freight and passenger volumes and is seen as a harbinger of the national budget’s tone.

For the first time, the cost of shipping goods by rail will be linked to fuel prices, Bansal said, in a move indicating the Congress-led government’s desire to curtail deficit-ballooning energy subsidies.

Bansal held passenger fares steady after hiking them last month for the first time in a decade. But he warned the 23 million Indians who travel daily on the trains they would have to pay higher fares down the line as the railway is losing 246 billion rupees a year on subsidised passenger services alone.

Bansal pledged to improve food, comfort, cleanliness and safety aboard trains as well as to build more lines and introduce new trains. “A plan investment of 633.63 billion ($11.7 billion) rupees is proposed for 2013-14,” up 5.3 percent from the previous year, Bansal said.

The implication for the national budget is that “government spending will likely rise at a slower pace”, said Nomura economist Sonal Varma, who added the government will still be wary of a “backlash ahead of elections” due in 2014.