Thanks, but no thanks, Mamata tells Pranab

The Union budget had an unpleasant surprise for railway minister Mamata Banerjee, who was still in the process of thanking finance minister Pranab Mukherjee for enhancing budgetary support for the railways by Rs5000 crore, from Rs10,800 crore to Rs15,800 crore.

Finance minister Pranab Mukherjee announced that goods transported by the railways will fall under the service tax net. In short, the additional Rs5000 crore he was giving were to be raised by taxing the department itself. According to budget estimates, the railways will garner Rs58,525 crore as freight revenue in 2009-10.

That being the case, the railway minister was quick to ask for a meeting with Mukherjee and met him on Tuesday evening. According to sources, Banerjee, whose populist budget requires a healthy dose of cash, wants a rollback of this provision.

“The projects that she has announced require a lot of money, and with the VIth pay commission liabilities, Banerjee was counting on the extra budgetary support and a status quo in railway income to finance them,” said a top source.

She reportedly told the finance minister that she cannot spare the Rs6500 crore or so that the railways will owe the central exchequer. “She did not want to raise the issue in public,” added another source.