Apprehensions that the first railway budget in 93 years to be announced as part of the Union budget will lead to a loss of focus for the national transporter were laid to rest on Wednesday, with finance minister Arun Jaitley announcing the largest ever allocation of Rs1.3 trillion to Indian Railways, with a gross budgetary support of Rs55,000 crore.

Jaitley also said the national carrier will focus on four major areas of passenger safety, capital and development works, cleanliness and finance and accounting reforms—matters traditionally announced by the Union railway minister.

Among the highlights: A corpus of Rs1 trillion for a rail safety fund to be spent over five years; solar power for 7,000 railway stations; redevelopment of 25 railway stations; 70 projects for construction and development through joint ventures with nine state governments; and commissioning of 3,500km railway lines in 2017-18, up from 2,800km in 2016-17.

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The budget also proposed stock market listing of railway enterprises like Indian Railways Catering and Tourism Corporation (IRCTC), Ircon International Ltd and Indian Railways Finance Corporation (IRFC), and end-to-end transport solutions by Indian Railways in selected commodities by partnering logistics companies.

The budget also waived service charges on railway e-tickets to encourage cashless transactions and made AC class tickets cheaper by Rs40 and sleeper class by Rs20.

Hinting at a passenger fare hike, the finance minister said that railway tariffs would be fixed taking into consideration costs, quality of service, social obligations and competition from rival transport forms.

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Biswanath Bhattacharya , Partner, Infrastructure and Government Services of KPMG, says the initiatives seem to acknowledge the fact that railways is losing share in both freight and premium passenger services to alternative modes of transport, necessitating an integrated approach to greater safety, cleanliness and passenger comfort, and higher service levels to freight customers through end-to-end services. Accounting reforms will also facilitate better management control systems to track performance improvement, Bhattacharya said.

Welcoming the budget, railway minister Suresh Prabhu said it’s a good and supportive budget as it focuses on making railways a better mode of transport. He said it will help synergize the investments in railways, roads, waterways and civil aviation.

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“One of our major demands was a railway safety fund which would help to eliminate a lot of barriers which impact train speeds. The fund would be used for several purposes like building railway overbridges, ending unmanned crossings, etc," Prabhu said.

Prabhu said one of the focuses would be solar power which will help Indian Railways accomplish its Mission 41K, a plan to save Rs41,000 crore in next 10 years by electrifying 90% of railway lines, and also reduce expenditure on power.

“Railways’ plans to develop 1,000 mega-watt (MW) solar (power) at 7,000 stations will help in developing a distributed solar ecosystem across India and also 100% electrification of rural areas should also integrate solar distributed generation as part of the scheme for better reliability," said Sanjeev Aggarwal, managing director and chief executive of Amplus Energy.

Freight loading is expected at 1,165 million tonnes (MT) in 2017-18, which is 71.50MT over revised estimates 2016-17 and earnings at Rs1,18,998 crore. Railways is expected to earn Rs50,125 crore in passenger traffic, taking total receipts to Rs1,89,498.37 crore.

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