NEW Delhi: The Indian Railways will spend Rs32,165 crore, or as much as 19% more money, in the coming year to improve its services, get new wagons and develop a track that will be used solely to transport goods in an economy expanding at more than 9%.
In fiscal 2007, the railways spent Rs27,011 crore for such improvements.
This is the fourth straight year that railway minister Lalu Prasad has upped investments in India’s largest employer, which has had a major financial turnaround.
“By reducing the railway fares, the minister has shared the profits with the users,” said R. Seshasayee, president, Confederation of Indian Industry. “The budget truly heralds a modern approach to managing the largest public service through use of technology and innovation.”
To help boost productivity at the railways, Prasad is phasing out the older open and covered wagons; he is bringing in newly designed wagons which would be suitable for carrying steel and petroleum products.
An increase of 10% in wagon productivity would lead to an annual incremental earnings of Rs4,000 crore for the railways, said Prasad.
A continuing improvement in technology and productivity is also expected to help keep costs under control.
The operating costs of the railways is expected to increase only marginally from 78.7% in fiscal 2007 to 79.6% in fiscal 2008.
An operating cost of 79.6% means that for every rupee spent by the railways, they are able to save around 20 paise. A steady operating cost will mean 32 new railway lines will be introduced, even as Prasad reduces passenger fares to boost rail traffic.
Around 200 diesel and 200 electric locomotives and 11,000 wagons will be produced next fiscal to keep pace with growing demand for rail services.
Also, in order to improve the carrying capacity of the trains, higher axle trains of 22.9-tonne axle load would be introduced on several routes and 25-tonne axle load trains on other select routes.
Production of new passenger coaches with higher carrying capacity will also begin from 2007-08, Prasad said.
Set on achieving a freight load target of 1,100 million tonnes and passenger traffic of 840 crore by the end of fiscal 2012, Prasad announced a 34% increase in rolling stock to Rs9,218 crore compared with Rs6,898 crore in 2006-07.
Rolling stocks includes spending on locomotives, carriages, wagons and rail cars.
There has also been a substantial increase in the projected spending on rail safety. Of the Rs17,000 crore special railways safety fund, most of the works of renewal of aged tracks, bridges, track-circuting and rolling stock will be completed by March 2007 and all remaining works will be completed by March 2008, Prasad said.
Spending on level crossings is expected to increase by around 82% to Rs 500crore from Rs275 crore in 2006-07. Similarly, spending on bridges is slated to increase by 26% to Rs551 crore next fiscal from Rs436 crore in 2006-07.
The railways have also been sanctioned a 32% increase in their annual plan outlay for fiscal 2008 at Rs31,000 crore, the largest so far, which will help the railways carry out their modernisation plans.