Rail Budget 2016: ‘A pragmatic, purposeful and people-centric Budget aligned to the long-term vision’

Published: February 26, 2016 12:29:05 AM

Rail Budget 2016: This year’s Railway Budget is pragmatic, purposeful and people-centric. Pragmatic because the minister, given the economic scenario, has not increased passenger and freight fares.

Rail Budget 2016: This year’s Railway Budget is pragmatic, purposeful and people-centric. Pragmatic because the minister, given the economic scenario, has not increased passenger and freight fares. Purposeful because the Budget initiatives keep the long-term reforms journey intact and on track. People-centric because there are many initiatives which are aimed at bettering the amenities and services to passengers.

The financial performance of the railways shows mixed results. Against the budgeted gross traffic receipts, there is a shortfall of Rs 15,744 crore. However against the budgeted ordinary working expenses, there is a saving of Rs 8,720 crore. The excess of receipts over expenditure is Rs 11,402 crore. In a year when the passenger and freight traffic has actually gone down, the achievement of an overall surplus is an achievement. In the coming year, the operating ratio has been targeted at 92%.

The proposal is to reorganise the Railway Board on business lines and have cross-functional directorates who will focus on areas such as non-fare revenue enhancement, speed enhancement, etc. This is a major reform initiative and will bring in an “organisational” instead of “departmental” thinking at the top.

Another major reform is permitting the container train operators to carry all traffic except coal and specified mineral ores. Part loads (allowing train formations of lesser than 45 wagons) during non-peak season has also been allowed.

Speeding up of trains has to go hand in hand with segregation of traffic and the minister has taken up initiatives in exactly this direction. On the one hand, he has announced that three corridors viz., Delhi-Chennai (north-south), Kharagpur-Mumbai (east-west) and Kharagpur-Vijayawada (east coast) will be taken up on priority for developing dedicated freight lines. The high speed railway line from Mumbai to Ahmedabad is moving forward with funding from JICA and will need induction of higher technology in the railway sector. “Humsafar” would be fully air-conditioned AC 3-tier trains, “Tejas” trains will run at 130 kmph and will have entertainment facilities and passenger amenities, and “Uday” will be overnight double-decker trains. There would also be “Antyodaya Express” which would be an unreserved, superfast service. It is to be noted that the exact routes of these new trains have not been elaborated. If the routes are chosen pragmatically, the right balance of social and financial impacts can be achieved.

The Budget has many positive elements related to JVs with states for railway projects, seven “Missions” focussed on zero accidents, increasing tonnage, higher speed, efficient procurement, better accounting practices, increasing railway terminals/sidings and higher capacity utilisation. The Budget is well-balanced, reformist and aligned to the long-term vision to improve the railway sector and increase modal share.

By Rajaji Meshram, Director – infrastructure and government services, KPMG, India

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