Railway minister Sadananda Gowda is likely to announce 100% FDI and a more investor-friendly PPP model for the sector in his maiden budget.
In a meeting with finance minister Arun Jaitley on Tuesday, the minister discussed steps to boost railway's revenue receipts. According to sources, Gowda has also asked for a hike in the gross budgetary support (GBS) in the coming general Budget by almost Rs 10,000 crore to Rs 40,000 crore. The GBS was put at Rs 30,000 crore in the interim Budget. The issue of fare hike was also discussed in the meeting, sources said.
In the wake of the recent accident in UP in which over 40 people were killed, the railways has also asked for a non-lapsable safety fund from the finance ministry. In the previous NDA government's regime, the railway ministry was given a safety fund of Rs 17,000 crore, which helped them bring down the accident rate.
“According to the 12th five-year Plan, we should get Rs 2 lakh crore as the GBS for the Plan period (Rs 40,000 crore a year) But we have been getting far lesser amounts. How do we survive when the passenger fares can't be rationalized?,” a senior railway board member asked.
For the past three years, railways has been cutting its annual Plan outlay by over Rs 5,000 crore due to cash crunch. The operating ratio, which was expected to be around 87%, has shot up to 90.4% in FY14 leaving it with little cash.
The railway ministry is also awaiting for the final nod from the government to increase its passenger and freight tariffs by around 14% and 6% respectively.