Budget 2018: Need to see how investments have influenced railways

By: | Published: February 2, 2018 5:48 AM

Budget 2018: The railway plan outlay is Rs 1.47 lakh crore for 2018-19, about 1% of GDP. If GDP grows at 7.5-8% for the next 15 years, the railways investment in modernisation and creation of requisite network capacity could be projected at Rs 35 lakh crore between 2018 and 2032.

budget, Arun Jaitley, insurance companies, budget 2018 india, mutual funds, budget 2018 date, budget india, budget 2017 18, tax, budget line, budget highlights 2018, budget meaningBudget 2018: Indian Railways has demonstrated a monthly loading capacity of 58.4 billion tonne km (101 million tonne) in December 2017 which is a good sign. (Image: IE)

Budget 2018: Indian Railways has demonstrated a monthly loading capacity of 58.4 billion tonne km (101 million tonne) in December 2017 which is a good sign. The trend will continue in the last quarter and 2017-18 is likely to fetch a cumulative tonne km of 655 billion, unless the commodity lead management is so efficient that it can catch up with the best-ever performance of 691 billion in 2012-13, from where the slump in rail freight started. As of now, the infrastructure network has a capacity to handle more than 1,200 million tonne and 800 billion tonne km per year which is underused. The railway plan outlay is Rs 1.47 lakh crore for 2018-19, about 1% of GDP. If GDP grows at 7.5-8% for the next 15 years, the railways investment in modernisation and creation of requisite network capacity could be projected at Rs 35 lakh crore between 2018 and 2032. There is an evident need to watch how investments have so far influenced growth of rail transport business in India.

The real boom in India’s economy started during India Shining days in 2003-2004, when India logged a GDP of Rs 14 lakh crore, reflecting 8.2% growth. The railways then also planned allocation of 1% of GDP. Both rail cargo and passenger business recorded massive growth consistently in subsequent years till 2010. During the 11th Plan, railways plan spend was doubled to Rs 191,000 crore (2008-2012). Then came Pitroda Committee Report which recommended Rs 5,60,000 crore investment for modernisation. The railways spent a massive Rs 5,08,600 crore between 2012 and 2017. In other words, Rs 7 lakh crore was spent between 2008 and 2017. Unfortunately, these investments did not make any visible or perceptible impact. Rather, the outcomes were discouraging. Disturbingly the high watermark set for PKM and NTKM, virtually refused to grow starting 2012. Both indices are giving negative signals till date.

Watch: Railway Budget 2018: 10 Things To Make Passengers Happy

The silo mentality of the Railway Board will now greedily try to capture as big a share as possible of the future plan spending packages. If `7 lakh crore plan spend during 2008-17 could evaporate, whether another expensive plan spend on the same obsolescent technology rail network system be safe, effective and beneficial for India is an issue that needs a healthy national consultation and public debate. The British, who gave us this rail system, meanwhile, has stopped spending on old rail routes and are going for High Speed whereas India is pouring money on a twentieth century technology rail network. In other words, we could have completed a 3500 km, mostly elevated, Very High Speed Rail Diamond Corridor linking nearly 35 large cities en route and turned them into economic power houses with Rs 7 lakh crore. ‘

Income tax Calculator: Calculate impact of Arun Jaitley’s Budget 2018 on your tax liability

Read: Budget 2018 impact: Here is how you will save, invest, borrow, and insure; all you want to know

The next 10 year plan spends at 1% of a fast growing GDP, is a huge Plan size, which needs an Inter-Ministerial Task Force involving Department of Science and Technology and NITI Aayog for developing a Master Plan with inputs from the best of international consultants.

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.

Switch to Hindi Edition