Railway minister Suresh Prabhu will present his second budget tomorrow amidst speculation that there may not be any hike in passenger fares despite weak financial position. The reason is said to be elections in five states. It now has to depend on more governmental support and borrowing to fix its finances in its budget.
Prime Minister Narendra Modi’s government unveiled a $137-billion, 5-year modernisation plan last, but a slump in passenger and freight revenues this year is straining its finances. Moreover, some populist measures are expected to shore up support from the people.
Total revenue is up 5.8 per cent in the first 10 months of this financial year, below the double-digit pace in the past.
A proposed 24 per cent hike in the salaries of 2.6 million employees and pensioners, meanwhile, will land the railways with a wage bill of about $4.7 billion.
The railways, however, are still expecting about Rs. 50,000 crore in support for projects in 2016-17