Rail Budget 2016: ‘Dedicated freight corridors, time-tabled freight trains are steps towards right direction’

By: |
Published: February 26, 2016 12:18:07 AM

Rail Budget 2016: Board has shown courage to set up SRESTHA led by scientists to develop a long-term R&D strategy, which is commendable

After more than a year of bonhomie with rail users, through tweeting, the railway minister has finally got in to serious business in his Budget. The minister has become wiser since his last Budget when he was persuaded to project exaggerated top line revenues, with overestimated incremental freight and passenger traffic volumes and incomes. Reason has dawned on the Board that the economy, though performing well, is not going to offer anything much as incremental freight and passenger volume in FY17 also

Therefore, A K Mittal and his team have done a good job in bringing down their top line revenue projections closer to that of 2015-16. Basically, Indian Railways (IR) is like Walmart, they do business with the bottom of the economic pyramid in their respective countries. IR is a bulk carrier of social goods such as coal, metal ores and minerals, fertilisers, food grain, etc., where transportation pricing has to keep in mind that many of the commodities that they carry will have an impact on cost of electricity generation, food, steel — all vital inputs for making the economy competitive and affordable to lower income user families. Similarly, 91% of the journeys in India are in second class.

The 2015-16 Rail Budget was framed expecting a record incremental freight business volume of 85 million tonnes. Railways expected `15,000 crore incremental revenues from freight, of which `8,000 crore is targeted from volume and `7,000 crore from freight tariff readjustments. But when Rail Bhavan was getting ready for their real take-off budget in 2016-17, the unthinkable happened. The economy nearly stopped offering any incremental freight traffic to IR. What was more shocking is the way the bottom line of Rail Business results emerges – it still makes a decent profit in 2015-16 with almost zero growth in freight business. This was possible not just because of fall in fuel prices but also in the way in which Mittal led his Railway Board to effectively rein in the ordinary working expenses. This was supplemented by harvesting Passenger revenues through extra services, coaches, dynamic fares etc.

This Budget is definitely development oriented. The focus on dedicated freight corridors and time-tabled freight trains are a step in the right direction. The announcement of east-west and east-south corridors is timely.

The decision to take away R&D work from RDSO was long overdue and many Boards had thought about it. Mittal’s Board has shown the courage to set up SHRESTA led by scientists to develop a long term R&D strategy, which is commendable. Overall, it is a good Budget, but this speech was badly written. Narration of too many routine housekeeping functions along with important projects and policy proposals has concealed many of the jewels in the Budget.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1Budget 2016 session: Govt open to criticism, but there can’t be a single ideology, says Arun Jaitley
2Rail Budget 2016: Experts give thumbs up to Rail Budget plan for rail auto hub in Chennai 
3Nitish Kumar describes Railway Budget as ‘disappointing’