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The government will increase investment in the Indian Railways to Rs 8.5 lakh crore over the next five years, Railway Minister Suresh Prabhu said in his budget speech on Thursday, promising to modernise existing tracks but shying away from raising passenger fares to fund the expansion.
Presenting the railway budget, Prabhu said the government would “set the direction of a long and difficult road of reform”.
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Freight rates for cement, coal, foodgrain & pulses, urea, kerosene and cooking gas were increased by up to 10 per cent, to mop up an additional Rs 4,000 crore a year. While common salt was left untouched, there will be a marginal reduction in the freight adjustment for diesel and limestone, through re-classification of goods and distance rationalisation.
No new trains or lines were announced in the Budget — a departure from a tradition of laying on new services to politically important constituencies — but the minister said he would concentrate on consolidating the existing ones.
“I have not increased the passenger fares,” he announced at the outset of his hour-long budget speech and made no mention of the rationalisation of freight rates that was done by a sleight of hand through an explanatory memorandum.
Passenger fares are subsidised by freight revenues, which in India are higher than other countries. Prabhu said he planned to raise the amount of freight carried to 1.5 billion tonnes a year, from 1 billion tonnes at present.
Prabhu raised the Plan outlay for 2015-16 by 52 per cent over the revised estimate of 2014-15 to Rs 1,00,011 crore. Passenger earnings growth was pegged at 16.7 per cent and earnings target budgeted at Rs 50,175 crore.
A trusted aide to Prime Minister Narendra Modi, Prabhu said he would raise funds from multilateral lenders, infrastructure and pension funds, as well as by “monetising” railway assets. He said the Indian Railways would not be privatised.
“Over the next five years, the Railways has to undergo a transformation,” Prabhu said in a speech that was seen as short on details.
He said the share of rail revenue available for investments would rise to 11.5% in the financial year to start on April 1, up from 8.2% in the current year.
The country has more funds available for investment, thanks to a sharp drop in the price of diesel fuel that powers most locomotives.
The BSE Sensex reacted negatively to the speech, sinking 0.7% from its previous close, with wagon makers Titagarh Wagons down 2.6% and Texmaco Rail & Engineering closing 7% lower.
In a Budget that had no big announcements but aimed at providing more facilities, Prabhu unveiled 11 major thrust areas — to improve cleanliness, provide better bed linen, offer helpline for ensuring security, including through surveillance camera, ticketing and e-booking of meals of choice.
On-board entertainment on select Shatabdi trains, provision of Wi-fi in Category-B trains and 200 more stations to be brought under Aadarsh Station Scheme were some of the passenger amenities that the railway minister announced.
Goods earnings was proposed at Rs 1,21,423 crore, including rationalisation of rates, commodity classification and distance slabs.
The other thrust areas include efforts to again make the Railways the prime mover of economy, resource mobilisation for higher investments, decongestion of heavy routes and speeding up of trains, passenger amenities and safety.
Other coaching and sundries were projected at Rs 4,612 crore and Rs 7,318 crore. Gross traffic receipts were estimated at Rs 1,83,578 crore, growth of 15.3 per cent.
The cleanliness project includes new toilets covering 650 new stations, bio-toilets, national fashion technology to design bed linen, online disposal of bed rolls. On passenger facilities, the Budget extended the window for advance booking of tickets from 60 days to 120 days.
An ‘Operation five minutes’ was announced for speedy issuance of unreserved tickets, and other initiatives like hot buttons, coin-vending machines and concessional e-tickets for differently abled passengers.
The minister said spending would be focused on improving and expanding existing railway lines, many of which were operating at more than full capacity, with the average speed of the country’s best trains at a sluggish 70 km an hour.
Excluding market borrowing, the amount projected for investment in 2015-16 is up by 31%, signalling an increased commitment to infrastructure from government funds.
E-catering would be launched for select meals from an array of choices, ordering food through IRCTC websites at the time of booking of tickets and integrating best food chains into the project.
