The Hindu : Trade, industry welcome budget

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

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National

Trade, industry welcome budget

By Our Special Correspondent

NEW DELHI Feb. 26. Although the Railway Budget for 2003-04 presented to Parliament today was generally welcomed by the apex trade and industry bodies, there were stray voices which described it as a populist document.

While CII complemented the Railway Minister, Nitish Kumar, for presenting a rational and balanced budget, the ASSOCHAM struck a discordant note. It termed the package of proposals unfolded by Mr. Kumar as not only populist but also as one that missed the opportunities for improving railway finances by removing the cross-subsidisation on account of high freight rates and low passenger fares.

The chiefs of three apex industry bodies, FICCI, CII and ASSOCHAM — A.C. Muthiah, Ashok Soota and R.K. Somany — hailed the focus on customer service and safety and introduction of new trains and extensions. However, Mr. Somany cautioned against excessive borrowing through the Indian Railway Finance Corporation to meet the growing demand for investment in rolling stock and maintenance of plant and machinery.

Mr. Somany regretted that serious consideration had not been given to commercial exploitation of huge surplus land with the Railways, a process flagged off with great fanfare in the early nineties, especially in view of the fact that the proceeds of disinvestment of PSUs are unlikely to be transferred to the railway kitty in any significant measure.

Dr. Muthiah and Mr. Soota said the budget showed the commitment of the department to turn the year 2003-04 as the year for consumers. The white paper on railway safety and other proposals, including the employment generation measures, would usher in an era of revival of the railways, which was long overdue.

Terming the railway budget as rational and balanced, Mr. Soota said a number of positive and visionary steps, particularly rationalisation and reclassification of freight structures, among others, would go a long way in enhancing competitiveness of the railways.However, in spite of elections round the corner, Mr. Soota said the Railway Minister could have placed economics above politics and hiked the passenger fares to phase out cross-subsidisation to further improve the health of the Indian Railways. Responding somewhat differently, the PHDCCI chief, P.K. Jain, observed that though an attempt had been made to rationalise the freight structure by reducing the band of freight rates and reducing the classification of certain commodities where railways were facing stiff competition, these measures might still not be adequate to divert additional goods traffic to railways. The budget did not rise above short-term focus in its investment initiatives, he said.

Like Mr. Muthiah, the Indo-American Chamber of Commerce chief, Vinod Chandiok, hailed the railway budget as people and industry-friendly. "It should generate more resources and achieve optimal deployment of the labour", he said.

While the FIEO president, M. Rafeeque Ahmed, said it was a good budget but lacked focus for exports, the chairman of SAIL, V. S. Jain, said the railway budget was a shot in the arm of industries in general and iron and steel industries in particular.

J.D. Aggarwal, chairman, Indian Institute of Finance, has welcomed the budget as people-friendly and employment-oriented (would generate 23,500 additional vacancies in safety category and constables). "The budget sounds good for freight industry," was the response of Vineet Aggarwal, executive director of the Transport Corporation of India.

Vikram Thappar, president of the Indian Chamber of Commerce said there was a need to look at issues like reliability, door-to-door service features and reduction in transit. The Federation of Associations of Small Industries of India chief, A.K. Poddar, underlined the need to improve the passenger and goods train movement in the North Eastern region.

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