Feb 25, 2016 07:54 AM IST | Source: IBNLive.com

Rail Budget 2016: Decrease in freight rate, more capital outlays likely

Suresh Prabhu may actually decrease freight rates with an eye on increasing volumes and thus improve revenues, sources said. He could also bring in a new policy for cartage.

Rail Budget 2016: Decrease in freight rate, more capital outlays likely

Railway Minister Suresh Prabhu may opt to decrease freight rates and look for other avenues to raise additional revenue in his second Rail Budget on Thursday.

Suresh Prabhu may actually decrease freight rates with an eye on increasing volumes and thus improve revenues, sources said. He could also bring in a new policy for cartage.

While falling revenues and increasing demand for funding various capacity augmentation projects demand a hike in passenger fares, the government may be wary of this with elections are round the corner in four states.

The cross-subsidy from freight to passenger operation has crossed Rs 30,000 crore this year while the Seventh Pay Commission burden is about Rs 32,000 crore.

Sources said the minister is likely to announce a new catering policy in his speech with special focus on e-catering.

Despite the grim economic condition, the Railway Budget is expected to increase capital expenditure to enable massive capacity creation.

Focus will be on safety upgradation, electrification and doubling to clear traffic bottlenecks, sources said.

A plan is also on to have one additional bogey in in every express and fast train to be named after the late Jan Sangh leader Deendayal Upadhyaya.

To improve revenues the Rail Ministry is likely to go in for a new advertising policy.

The ministry is also planning a new advertising policy to generate extra revenue.

Narendra Modi's government unveiled a USD 137 billion, 5-year modernisation plan in 2015 to overhaul the network and boost growth, but a slump in passenger and freight revenues in 2016 is straining its finances

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