Govt’s Rs1tn budget aims to put railways back on track

IANS/New DelhiSparing a passenger fare hike but raising freight rates again, Minister Suresh Prabhu presented his maiden budget for Indian Railways yesterday, with a slew of measures to improve service quality, safety and reach and a 52% jump in plan outlay for 2015-16 at Rs1,000bn ($16.7bn).Raising some passenger train speeds by 50% on nine key routes, faster freight trains, user-friendly ladders to mount upper berths, Wi-Fi in 400 stations, more money for escalators, easier norms for unreserved tickets, 17,000 bio-toilets in trains, better connectivity in north-east and cameras for safety of women travellers are among the other highlights of the budget.“There will be no hike in passenger fares. We will focus on improving passenger amenities, including cleanliness,” Railway Minister Prabhu said in a 66-minute speech in the Lok Sabha, watched keenly by Prime Minister Narendra Modi who had handpicked him for the job.Even though Prabhu made no mention of any revision in freight tariff in his speech, as has been the norm in the past, the minister, nevertheless, revised it upward between 2.1% and 10%, not sparing even commodities like grain, pulses, urea and coal.In the previous budget tabled by the Modi government in July last year, passenger fares had been hiked by nearly 15% while the freight tariff was increased by 6.5%.The minister also promised a vastly improved operating ratio, which spells out how much money is spent on day-to-day operations to earn revenues -- an indication of the funds left for safety and expansion. Prabhu plans to bring down operating ratio to 88.5%, or the lowest in nine years, from an unsustainable level of 93.6% in 2013-14 and 91.8% for this fiscal. This is better than what the prime minister had asked the railways to do a few days ago.Globally, a 75-80% or lower ratio is seen as a healthy benchmark.Prabhu also seemed to have ruled out the sale or leasing of surplus land and other assets to get revenues. “We will monetise our resources rather than sell,” he said, adding: “Business as usual of asking for budgetary support from finance ministry is neither sustainable nor necessary.”He pegged a 52% jump in the plan outlay for 2015-16 at Rs1,000bn, projecting a 16.7% growth in passenger earnings and 13.5% in freight. The minister has also proposed a 46.5% increase in market borrowings to bridge the fiscal gap.Soon after the budget presentation, Prime Minister Modi gave a thumbs up to Prabhu. “Rail budget 2015 is forward looking, futuristic and passenger-centric, combining a clear vision and definite plan to achieve it,” Modi said in a tweet, even calling it a watershed moment for railways.The same, however, was not true with the markets, with the Bombay Stock Exchange Sensitive Index (Sensex) falling 260 points, or nearly 1%, with most stocks of companies associated with railways ending in the red.Indian industry, by and large, welcomed the proposals notably the substantial hike in the plan outlay and the emphasis on private-public partnerships for big-ticket projects. But some captains of industry felt the freight hike could have been avoided.The minister began his speech with what ails Indian Railways.“Railway facilities have not improved very substantially over the past few decades. A fundamental reason for this is the chronic under-investment in railways, which has led to congestion and over-utilization,” he said.“As a consequence, capacity augmentation suffers, safety is challenged and the quality of service delivery declines, leading to poor morale, reduced efficiency, sub-optimal freight and passenger traffic and fewer financial resources. This again feeds the vicious cycle of under-investment,” he said.“This must be put to an end,” said the chartered accountant-turned-politician, while presenting the budget for one of the largest railway networks in the world. “We have to make our Indian Railways a benchmark organisation in safety, security and infrastructure,” he said in a speech peppered with several Hindi couplets.Earlier the minister presented a white paper on the Indian Railways, which he said will form a trilogy of what plans he had in mind for one of the largest such networks in the world along with his budget for 2015-16 and a Vision 2030 document to be presented later in the year.He also set four goals to transform Indian Railways: improved customer experience, safer travel, modern infrastructure and financial self-sustainability. “We will also create a separate department for taking care of cleanliness.”The country boasts one of the oldest and the largest railroad networks in the world, ferrying some 23mn people, or a population the size of Australia, as also 2.65mn tonnes of goods on its coaches, each day.It serves from 7,172 stations via 12,617 passenger and 7,421 freight trains on a track network spanning Baramulla in the Himalayan foothills of Kashmir to the southern tip of Kanyakumari in Tamil Nadu, and from Naharlagun in Arunachal Pradesh to the port town of Okha in Gujarat.HIGHLIGHTSl No hike in passenger faresl Speed of trains running at 110kmph -130kmph to be increased to 160kmph-200kmphl Over 17,00 toilets on trains already replaced, another 17,000 to be replacedl Toilets at stations need improvement; 650 additional toilets to be created in addition to 120 last yearl New department to keep stations cleanl Railways to work on ‘Swachh Rail - Swachh Bharat’l Defence travel system developed to eliminate system warrantsl SMS alerts to be introducedl Paperless ticketing system to be developedl Wi-Fi facility to be extended to category B stationsl Suburban network in Mumbai, Kolkata and Chennai to be augmentedl Announcement on new trains/frequencies to be made during current parliament sessionl 10 cities identified for creating fully-functional satellite terminals to reduce congestionl All newly-manufactured coaches to be braille-enabledl Online booking for wheel chairs to be enabledl Over 20,000 suggestions received on improving facilitiesl Railways proposes to install Train Protection Warning System and Train Collision Avoidance System on select routes at the earliestl During 2015-16, safety-related works to eliminate 3,438 level crossings at an expense of Rs65.81bn sanctioned.l Size of the plan budget has gone up by 52% from Rs657bn in 2014-15 to Rs1tn in 2015-16.l Investment of Rs8.5tn in next five yearsl Railways to increase daily passenger carrying capacity from 21mn to 30mn, increase track length by 20% from 1,14,000 km to 1,38,000km, grow annual freight carrying capacity from 1bn to 1.5bn tonnes.l Seventy-seven new projects worth Rs961bn sanctionedl Four goals: Deliver sustained improvement in customer facilities; make railways safer means of travel, expand substantially, make Indian Railways self-sustainablel Foreign rail technology co-operation scheme proposed to be launchedl New governance structure required; more decentralisation and deregulation; accounting system to be revampedl Resources to be generated through public-private-partnershipsl Assets to be monetised rather than sold; land records being digitisedl Products made by self-help groups to be encouragedl Railways cannot function in business-as-usual mode, have to keep up with changing timesl Green technology locomotives to be introducedl Two dedicated freight corridors gathering steaml Innovation Council and Technology Portal to be set up to invite suggestions on improvementsl MPs urged to use part of their funds for improving rail facilitiesl Open bids to be invited from private parties to develop railway stationsl Operational ratio of 88.5% targetedl Waste-to-energy conversion plants to be createdl Railways backbone of national connectivityl Will partner with private sector to improve last mile connectivityl Railways unique integrator of modern Indial Facilities not improved substantially over past few decadesl 1,219 sections on network - most of them overworkedl Nine thrust areas: Railways to once again become prime mover of economy; resource mobilisation for higher investments; decongestion of heavy haul routes and speeding up of trains; emphasis on gauge conversion, doubling, tripling and electrification; project delivery; passenger amenities, safety; transparency and system improvement; railways to continue to be the preferred mode of transport for the masses; sustainability