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Rail Budget 2016: Mr. Prabhu likely to Decrease freight rate

Rail Budget 2016: Mr. Prabhu likely to Decrease freight rate

Today, Railway Minister Suresh Prabhu may opt to decrease freight rates & see for other avenues to increase additional revenue in his 2nd Rail Budget . Mr. Suresh Prabhu may actually decrease freight rates with an eye on increasing volumes and thus improve revenues, sources told in reports.

He could also bring in a new policy for cartage. While falling revenues & increasing requirement for funding various capacity augmentation projects require a hike in passenger fares, the govt 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 30K crore in the year 2016 while the 7th Pay Commission burden is around Rs 32K crs. Sources told that, minister is likely to declare a new catering policy in his speech with special focus on e-catering. Despite the grim economic condition, the Railway Budget is estimated to increase capital expenditure to enable massive capacity creation.

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