 "Union Minister for Railways, Suresh Prabhu along with MOS Manoj Sinha arrive at Parliament for presenting the Railway Budget 2016-17, in New Delhi (pic: Sanjay")
Railway minister Suresh Prabhu’s second railway budget came perhaps at the most difficult times for the Indian Railways with the national transporter missing its targets for traffic earnings, while facing an additional burden of Rs 28,450 crore on account of increase in staff salary as per the Seventh Pay Commission recommendations.
Prabhu’s hour-long speech, however, skipped the grave numbers which he chose to table before the Lok Sabha as annexure to the speech. This prompted Trinamool Congress benches, led by Dinesh Trivedi, former railway minister, protesting. “Where are the numbers?” Trivedi could be heard saying just as Prabhu wrapped up his speech with a promise to take the Railways to its destination of Samridhi or success. The speech instead focussed on catchy slogans and wooing special categories like women and journalists.
The minister did not display a chartered accountant’s skill of addressing hard numbers and giving a concrete plan of what he wants to do with below expectations traffic earnings. Without increase in fares or freight rates for 2016-17, the minister could not perhaps have done anything else. The gross traffic receipts in 2015-16 were short by Rs 15,744 crore compared to the budget target of Rs 1,83,578 crore. Both passenger and goods traffic performed below expectation. The freight earnings have been impacted by the low demand from the core sector.
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The trend in traffic earnings witnessed from the first quarter of the year had prompted the Railways to take measures for containing the ordinary working expenses through controls on inventory, variable costs and contingent expenditure saving the Railways Rs 8,720 crore.
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For 2016-17, gross traffic receipts have been projected at Rs 1,84,820 crore, a 10 per cent increase over the revised estimates for the current year. The minister is hoping for an incremental traffic of 50 million tonne in freight.
Taking into account the likely increase in salary and pensions burden because of the Seventh Pay Commission which will hit the internal resources generation of the Railways, appropriation to the Depreciation Reserve Fund and other funds has been reduced. "These are challenging times, we are faced with two headwinds, entirely beyond our control; tepid growth of our economy's core sectors due to an international slowdown and the looming impact of the 7th pay commission,” Prabhu said in his speech.
Consequently, the operating ratio, a parameter of railway efficiency a percentage of spending over earnings, will deteriorate to 92 per cent next year against 90 per cent likely to be achieved this year.
The minister outlined seven missions for the organisation which includes enhancing the infrastructure strength to carry 25-tonne axle load, zero accidents, increasing speed and improving book keeping. Though he started his speech with three pillars of his strategy—Nav Arjan (new resources), nav manak (new norms) and nav sanrachna (new structures), the Budget did not come across as an inspiring roadmap.
