BackRail budget focuses on improved services, sustainable finances
Railway minister Prabhu says will use a mix of short- and medium-term measures to achieve goals
Premium(Abhijit Bhatlekar/Mint)
New Delhi: Making the Indian Railways financially sustainable, creating more capacity and reinforcing infrastructure, improving rail safety and enhancing the customer experience will be the main focus areas of the National Democratic Alliance government in the coming years.
Outlining the main priorities of the government, railway minister Suresh Prabhu said it will use a mix of short- and medium-term measures to achieve the goals. “We will increase our daily passenger carrying capacity from 21 million to 30 million," he said in his speech. “We will also increase track length by 20% from 114,000km to 138,000km, and we will grow our annual freight carrying capacity from 1 billion to 1.5 billion tonnes (in five years)."
The minister also outlined the government’s plan to generate surpluses from operations that will help in servicing debt as well as fund the ambitious capacity expansion plan.
For this, the focus will be on improving the operating efficiency, tighter control over costs, greater discipline over project selection and execution, and a significant boost to the railways’ revenue generating capacity, Prabhu said.
The government will build partnerships with states and key stakeholders such as public sector enterprises. While the states and the centre will form special purpose vehicles for financing key infrastructure projects, the government will partner with state-owned firms to build capacity to transport important commodities such as coal, iron ore, and cement from the place of extraction to where they are consumed.
The government also plans to seek long-term financing and technology from multilateral and bilateral organizations and other governments. It also promised better governance and a more transparent administration. The rail budget envisages an investment of ₹ 8.5 trillion over the next five years. The investment will be through a mix of budgetary support and pension funds and development institutions.
Enhancing customer experience and safety while modernizing infrastructure and services, but at the same time ensuring the railways is financially sustainable, is the main thrust of the budget, said Arvind Mahajan, head of infrastructure and government services at KPMG India, a consultancy.
“In the short term, the focus on augmenting and leveraging existing track infrastructure is a step in the right direction to make railways more viable," he said in a note. “To finance these initiatives, steps to enhance greater private sector participation through public private partnerships and joint ventures in rail connectivity projects and station re-development and funding from bilateral and multilateral sources are essential."
Prabhu said that improving the quality of travel for customers with services such as cleaner toilets and bed linen, improved stations and faster trains will be a major thrust area. The government also announced a number of steps to enhance railway safety. It will leverage technology more effectively for bookings and improving rail safety.
The industry welcomed the steps announced by the minister but pointed out that implementation will be key. “A lot of the short-term goals, which were low-hanging fruits, have been taken care of. The rail budget is an aggressive, ambitious and a thoughtful plan," said Nalin Jain, president and chief executive at GE (rail, mining, defence and aerospace) at a seminar organized by lobby group Confederation of Indian Industry. “It is a great blueprint, but needs to be backed by action."
Gaurav Mishra contributed to this story.
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