GST a major opportunity for Railways: Suresh Prabhu
Regarding GST impact on Railways, minister Suresh Prabhu says railways has advantage on long-distance transportation, highlights need for a dynamic business strategy
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New Delhi: Passengers will experience a dramatic change in speed and punctuality of Indian trains by 2020, railway minister Suresh Prabhu said in an interview.
Prabhu said that investments and reforms introduced in Indian Railways have already started showing results and the national carrier has no competition from cheaper flights as the railways will remain the preferred mode of transportation for millions of people. Edited excerpts:
How do you plan to enhance train experience of passengers amid complaints of delays and slow speed?
Society has changed a lot. Everybody wants instant things and instant solutions. If we would have started investing in these 30 years ago railways wouldn’t have reached this status. We are trying to do our best by enhancing passenger facilities like introducing high-speed trains Gatimaan and Tejas, elevators, better waiting rooms, clean my coach service, etc. The Indian Railways stations look cleaner now.
People need to understand how Indian Railways is functioning. How can you run a train, undertake its maintenance and infrastructure development, run freight services also and yet traffic will not be affected. We are doing everything that is necessary for it and its first time it is being done.
Once the freight corridors are completed by 2020 and the tracks would be decongested, passengers will start experiencing a dramatic change in speed and punctuality of trains.
How would you rate fiscal condition of the railways as compared to when you took over?
When we took over it was 92 (operating ratio). But, I’m not going to go by that. We have prepared a roadmap for railways finances and we are going to go by that. We would have five major focus areas. By 2019-2020 we plan to complete the freight corridor, finish most of the doubling and tripling of tracks so that the capacity to handle traffic will increase exponentially.
Today when people say why you don’t get your freight back, I try to explain them the point of where is the space to run more freight trains. We will be able to get our freight back once infrastructure is in place. We already have changed the freight policy and it has started showing results. Secondly on the revenue side we are launching new products like Tejas, Gatimaan that will give us revenue. Besides, we are developing regulatory framework to ensure financial stability for railways. Thirdly, we are reducing cost of operations by getting Rs41,000 crore as savings on energy in next 10 years. Fourthly, we are doing non-fare revenue that could fetch us Rs40,000 crore in next 10 years. And fifthly, we will have savings through enterprise resource planning for which consultations are already on.
What will be GST’s impact on Indian Railways?
It’s definitely going to impact. GST will impact everybody. When cyclone comes nobody can say I’ll not be affected. It’s a sweeping reform and will certainly impact railways and transport sector. How it’s going to affect railways we have to study properly and try to strategize. We cannot say that GST has come and I’m not going to do business. With it new opportunities will come. I look at it as a major opportunity because global market will be created through it. Inter-state transfers will increase because of GST. Roads will have advantage on short distance while railways has advantage on long distances. So railways can benefit for sure. However, that doesn’t mean that railways should sit idle. We must have proper dynamic business strategy which cannot be constant and needs to be evolving and changing.
What kind of transformation is railways witnessing through accounting reforms?
We are already working on Ajmer division. A lot of work is done. We cannot say anything till it’s implemented all over the country. Till few days back we didn’t even knew what our assets were and major outcomes. But this methodology has already started working.
Will the subsidized Udan scheme of the aviation ministry lure passengers away from the Indian Railways?
Indian Railways has been launching different products like Tejas Express, Gatiman Express which have the kind of amenities passengers are looking for. The issue of decongestion can be sorted out once freight corridors are ready. I feel it would be airlines that would need to rethink their strategy as during peak hours airfares are substantially high while train fares are still nominal as compared to them. Besides, it’s less-hassle free.