Union Budget 2012: FM announces calibrated excise duty hike to 12%

Finance Minister Pranab Mukherjee announced a 2 percentage point hike in the peak excise duty from 10% to 12%. He also proposed to set up a common tax code for service tax and excise duty.

This hike in excise duty means auto companies now have to pay excise tax of 24%.

Duty on readymade garments and processed raw food was reduced and mobile phones have been retained at 1%. Silver jewellery has been exempted.

This hike in excise and customs duty will yield over Rs 27,000 crore for the government, but will adversely impact the common man.
 
Due to slowing growth and high inflation, the manufacturing sector was already having a tough time making ends meet. A hike in excise duty will only add to their problems, making the cost of producing goods more expensive.

Excise duty has a direct relation to such sectors as auto, FMCG, capital goods, leather, gems and jewellery, fertilizer, textiles and consumer durables.

Though the collection of excise is to augment as much revenue as possible to the government, over the years it has been used as an instrument of fiscal policy to stimulate economic growth. But for a nation already reeling under cost pressures, this hike will (would have) only make (made) the cost of goods more expensive for consumers.

CII was against a hike in excise duty as it would adversely affect the growth prospects of the industry and result in higher cost to the consumer, in turn leading to inflation. However, because the dire fiscal situation, a hike in excise will only mean higher revenues for the government.

Travel from Bangalore to Chennai in 2 hrs

Bangalore, March 14, The privilege of travelling in an high-speed air-conditioned double-decker express to Chennai, covering a distance of about 360 km in a little over two hours.

Of the seven new express/mail trains Railway Minister Dinesh Trivedi announced Wednesday for Karnataka in the 2012-13 rail budget, introduction of a daily non-stop AC double-decker express will be eagerly awaited as it will reduce the travel time between the two cities by three hours from the five hours theShatabdi Express currently takes.

"Reducing travel time from Bangalore to Chennai by nearly three hours will be possible, as the double-decker express coaches are designed and built to run at 150 km per hour on upgraded tracks with no stoppages," a senior South Western Railway (SWR) official told IANS here.

Of the seven direct express/mail trains operated between the two cities, two are Shatabdis on six days a week, which run at 110 kmph, and two are inter-city trains that take over six hours due to their many halts.

"The double-decker express will be launched as soon as we get the new coaches and funds to upgrade the tracks, which currently enable Shatabdis to travel at 110 kmph," the official said on condition of anonymity.

The double-decker rakes, comprising eight stainless steel coaches and two power cars, are manufactured at the Rail Coach Factory at Kapurthala in Punjab.

"A double-decker coach can carry 128 passengers in comparison to 78 in a Shatabdi chair car, increasing the capacity by about 70 percent. With lower weight per commuter, the coaches are more energy efficient," the official pointed out.

96 new trains

Minister Dinesh Trivedi introduced 96 new trains as part of the 12th plan. His list includes introduction of 75 new Express trains and 21 passenger trains, besides 75 new services in Mumbai suburban rail network, 50 new services in Kolkata suburban rail network and 15 in Chennai suburban rail network. However, there is no mention of the magnet-pulled single rail Bullet trains that India has been aspiring to introduce.

Other highlights:

1. Rail fares hiked by 2-30 paise per km.
2. Second class fares up by 2 paise per km.
3. Platform ticket prices increased to Rs 5 from Rs 3
4. To introduce 75 new express train, 21 passenger trains. 132 trains were introduced in last Budget.
5. To introduce 45 new routes.
6. Emphasis on the Budget will be on strengthening railway safety.
7. Indian Railway safety fund pegged at Rs 16,482 crore.
8. Railways will require Rs 14 lakh crore over next 10 years.
9. Investment on Railways pegged at Rs 7.35 lakh crore in the 12th five-year plan.
10. Internal Resources of Railways pegged at Rs 1.99 lakh crore.
11. Aim to cut operating ratio (OR) to 74% by 2016-17 from 95% now.
12.  Aim for OR at 84.9% in fiscal 2013.
13.  Annual plan outlay for fiscal 2013 seen at Rs 60,100 crore, versus Rs 57,630 crore year-on-year.
14.  Railway's FY13 market borrowing seen at Rs 15,000 crore.
15.  Aim to spend Rs 6,647 crore on track modernization next fiscal year.
16.  Signalling system to be modernized.
17.  To spend Rs 39,110 crore in 5 years to modernize railway signalling and telecom.
18.  To electrify 6500 km of rail line in the 12th plan.
19.  Target 700 km of track doubling and 800 km of gauge conversion next fiscal year.
20. 114 new line surveys will be carried out.
21.  To allocate Rs 4,410 crore in fiscal 2013 for capacity augmentation work.
22.  To invest Rs 18,193 crore in rolling stock in FY13.
23.  To start coaching complex and terminal in Navi Mumbai.
24.  Rail coach factories proposed at Vidisha in Madhya Pradesh and Palakkad in Kerala.
25.  Aim to cut travel time between metros via faster trains.
26.  To set up Indian Railway Station Development Corp.
27.  To develop 100 stations via PPP (public private partnership) route in next five years. Stations to be developed like airports.
28.  To hire over 1 lakh employees in FY13.
29.  MOU signed for Rail freight corridor in Chattisgarh.
30.  PPP model to be firmed up for elevated rail line in Mumbai. 
31.  Satellite based real-time information trains in 18 months.
32.  Reputed global agencies to be hired for catering
33.  Eco-friendly toilets to be introduced in 2,500 coaches.
34. Will set up independent Railway Safety Authority.
35. To set up special purpose vehicle (SPV) to eliminate railway crossings.
36. Aim to eliminate all railway crossings in next five years.
37.  Railway Research Development Council to be set up

Rail Budget: 2nd class fare up by 2 paise/km

Train travel just got costlier! Minister Dinesh Trivedi has announced a hike in passenger fares for the first time in 10 years. Second class passenger fares have been upped by 2 paise per kilometre while sleeper class fares are up 5 paise per kilometer.

AC fares too see a hike by 10 paise per kilometer. First AC ticket is now expensive by 10 paise while second AC is costlier by 30 paise.

He also introduced 96 new trains as part of the 12th plan. His list includes introduction of 75 new Express trains and 21 passenger trains, besides 75 new services in Mumbai suburban rail network, 50 new services in Kolkata suburban rail network and 15 in Chennai suburban rail network. However, there is no mention of the magnet-pulled single rail Bullet trains that India has been aspiring to introduce.

Rail Budget 2012 - travel may get costly

It's the D-day and all eyes will be on Union Minister Dinesh Trivedi who will present the Railway Budget 2012 in Parliament. Sources say that the government is likely to impose a safety cess, although it will not be labelled a fare hike. Sources add that there is a possibility of an additional surcharge, called the Union government development surcharge.

However, the ministry is not likely to announce many new trains this year. A new premium scheme on reservation for a confirmed berth is also likely.

The emphasis, reportedly, will be on modernisation, infrastructural overhaul and on a dedicated freight corridor. Sam Pitroda's recommendations and the Kakodkar report are likely to be a part of the budget document.

Railway Board Chairman Vinay Mittal has said that a fare hike will bolster the railway finances only up to a limited extent. "The urgent need is to consolidate rather than expand," he says.

When asked if the current model of railways is a financially viable model, he said, "Trains run but we don't earn revenue because they are necessary."

"We fulfill a huge social responsibility. There are still areas in the country where people have not seen train in their entire life. There is a huge social cost," he added.

He further said, "There are four to five sources. One is a gross budgetary support. The government gives money. We have to generate our own resources as well. How do we generate through freight and fare and PPP? You have to increase the capacity."

"Even if you have a fare hike, the question is, how much can you do? The poorest of the poor have a certain affordability... and the government has a duty towards them."

But the Railways continues to announce new trains and projects are being distributed. When asked where will the money for those projects come from, the Railway Board chairman said the ministry has been very "circumspect this time" as far as the projects are concerned. "We need to consolidate rather than expand," he said.