Mumbai: Welcoming the rail budget presented in the Parliament on Tuesday by Railway Minister PK Bansal, India Inc. termed it as "soft" and "balanced" in approach under the given economic conditions.

"The emphasis on financial viability and fiscal discipline of the railways is most reassuring and a welcome direction. Financial discipline, safety and passenger amenities are inherent to the health and condition of this mode of transport, which is availed by the common man. The minister has paid due attention to each," said Confederation of Indian Industry (CII) director general Chandrajit Banerjee.

He said that with fuel prices getting deregulated, linking of freight rates to increase in diesel prices "is the correct direction to take". He said the government must be commended for taking this step. Lauding the lower operational ratio which would help provide much-needed resources to boost modernisation, the CII also termed the prioritisation of 347 projects with assured funding as "a very credible move".

"The CII looks forward to a clear roadmap on PPP (public-private partnership) for taking forward some of the more capital intensive projects," Banerjee said. But apex industry body Associated Chambers of Commerce and Industry (Assocham), while describing the budget as "soft", said that in its efforts to please all sections of society, the government missed another opportunity for effective corporatisation of the Indian Railways to ensure viable commercial operations.

"Capacity constraints of the railways remains the primary issue to be addressed... more so in the wake of mounting pressure on passenger and freight services and the rail budget could have put more focus on this," Assocham president Rajkumar Dhoot said.

According to Dhoot, while linking of freight charges to fuel prices appears logical, the government must simultaneously improve the operating ratios and resist from affecting the competitiveness of India Inc. by passing on its inefficiency. "It would have been better had the quick corrective action in the capacity addition and tariff areas been taken with required pragmatism considering the current slowdown of domestic economic activity," Dhoot said.

He rued that effective monopoly enjoyed by the railways in moving loose bulk commodities (such as coal and iron ore for export) over long distances has contributed to supply constraints. "There could have been more focus on the implementation aspect of stronger policies as policies that are already in place to address this issue are not seeing much progress," he said.


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