The Hindu : 'Industry friendly but lacking focus'

Online edition of India's National Newspaper
Thursday, Feb 27, 2003

Business

Business

'Industry friendly but lacking focus'

MUMBAI FEB. 26. Industry and trade associations have described today's Railway budget as industry friendly but lacking in focus and strategy to improve the performance and efficiency of the Railways. "Overall the budget has attempted to make the Railways competitive vis-a-vis roadways with reduction in freight rates,'' said C. R. V. Subramaniam, Senior Vice president, Larsen & Toubro.

The Bombay Chamber of Commerce and Industry (BCCI) President, K. Ramachandran, described it as a `gift' budget by the Union Minister for Railways, Nitish Kumar, on the occasion of Indian Railway completing 150 years. Mr. Ramachandran said the competitive freight rates announced today would boost the use of Railways for goods transport.

The BCCI and the IMC lauded the Minister's efforts to improve the cleanliness and safety of Railways and suggested that the Centre should consider the Railways as a "commercial organisation.'' The proposal of freight reduction in the budget was a move in the right direction, particularly for the cement industry. "This is a welcome relief to the cement industry, which has been passing through difficult times,'' Mr. Subramaniam said. He pointed out that the cement division of L&T transports about 30 per cent of its production through rail. However, he added the fine print would have to be studied before quantifying the gains.

Mr. Paras Adenwala, head, equities, Birla Mutual Fund, said it could be termed as populist budget with no hikes in fares but actual cuts in freight rates.

While this would make the common man and the businessman happy in the short term, is it good for them in the long term, asks Mr. Adenwala.

Voicing concern over the infrastructure needs of the Railways, Mr Adenwala said, "This can not happen if the revenues do not improve. However, being an election year, it would be improper to expect anything rational.''

A. K. Jain, Executive Director, Associated Cement Company (ACC), said the Railway budget appeared to be good for industry in general and the cement industry in particular considering there is freight reduction for both cement and clinker.

Freight rate reductions on petroleum products, cement, pig iron and some other commodities only suggest that "the Railway budget has focussed in increasing the overall revenue but has not addressed the growth concern for the domestic industry,'' Mr. Balasubramanian, head, income funds, Birla Mutual Fund, said.

The All Indian Association of Industries (AIAI) President, Vijay Kalantri, said the budget was a step in the right direction mainly in areas such as safety, security and punctuality. The uniform classification for commodities and various plan layouts for goods trains would bring more efficiency and support to the industry, he added.

Meanwhile, the noted economist and former member of the State Planning Board, H. M. Desarda, told UNI in Aurangabad that that the Railway budget was "overtly populist and calculated soft pedalling is apparent'' as the Government had its sight set on the general elections due in 2004.

In fact, the concessions made in the budget to the "elite'' commuting by various A/C classes were `conspicuous and unwarranted,' he pointed out.

He, however, welcomed the effort to bring back goods traffic to the Railways, which, he said, was long overdue and economically and environmentally more wise.

UNI

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