Mumbai: In view of the increasing number of rail accidents across India, the government is likely to impose a safety cess on rail passengers in the forthcoming Budget as part of its plan to set up a dedicated safety fund for improving the safety standards of Indian railways.
According to experts, the government is expected to increase its allocation of funds for railway safety measures a part of which would be directly provided by the finance ministry while the remaining portion would be raised from other sources including an additional cess from passengers.
As per estimates, the Railways require Rs 20,000-25,000 crore per year to replace old assets. “In the 2016 Budget, a provision of mere Rs 3,200 crore was made for the depreciation reserve fund. We may expect an increase in provisioning under this head.
In addition, railways ministry is planning to establish a dedicated safety fund for such measures. 25 per cent of the funding is expected to come from the finance ministry while remaining will be raised through other sources such as safety cess to be levied from the customers,” said Abhaya Agarwal, EY India.
