For Bansal, budget is a balancing act between fiscal health, political math

As he prepares to present his maiden Budget Tuesday, Railway Minister Pawan Kumar Bansal faces the tough task of balancing financial prudence and political aspirations of a party going to polls in a year.

If financial health of the Railways is a criterion, Bansal has every reason to increase passenger fares for the second time in as many months because more than half the money — about Rs 6,600 crore — the previous hike was estimated to bring in will go into paying a fuel bill inflated by the recent increase in diesel prices and the impending hike in electricity charges. The Railway Board, in fact, has discussed a proposal to tweak freight charges in view of the fact that the diesel price increase has even made road transport, the Railways' competition, costlier, and the minister, sources said, was meeting with the board Monday evening to reach a decision on this.

But such a move would be unsound for a government facing the ballot in a year, a section of the Congress has reminded Bansal.

Bansal, on his part, has met Congress chief Sonia Gandhi and, sources indicated, discussed financial compulsions of the Railways as well political implications of his budget.

Whether he bites the bullet on fare and freight increase remains to be seen but one thing is all but certain: Bansal won't be very stingy with new trains and extension of services of existing ones. And sectors with have the most public interface —catering, station development, cleanliness and punctuality —would get a fillip with more funds, sources indicated.

The Railways has been working on introducing a Fuel Adjustment Component to fares and freight rates to insulate the national transporter from fluctuations in fuel prices. This and specifics about a quasi-independent Tariff Regulatory Authority, announced a year ago, are expected to be spelled out in the Budget, sources said. The authority's recommendations may be only "advisory" and the Railways is likely to circulate it for inter-ministerial consultation before submitting it for Cabinet approval.

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