Please-all rail budget, but questions remain

As expected, the rail budget for 2016-17 is more an exercise in consolidation while seeking to please different stakeholders and raise finces. For Railways minister Suresh Prabhu, ‘restructure, reorganize and rejuvete’ are the three pillars of his budget. In this please-all effort, Prabhu has left passenger fares and freight rates untouched even as he hinted that freight rates will be revised. Most experts have been warning against cross subsidizing passenger fares from the freight segment. Prabhu has now put it on record that the Railways is losing Rs 30,000 crore a year subsidizing passenger fares. Five States are set to go for assembly elections this year, while the cash-strapped Railways also needs to carry on modernizing and provide better customer satisfaction. Prabhu has done a bit of balancing on one side with customer-oriented services including smarter ticketing, 33 per cent reservation for women within the reserved quota, baby-sitting facilities at stations and kids’ menu, disabled-ebled toilets, automatic doors, use of social media, cleaning of coach on demand through sms, free Wi-Fi access to 100 stations this year out of planned 400 stations, and 17,000 bio-toilets in trains and 475 stations this year. As in last year, the Railway minister has avoided big bang announcements, focusing on capacity creation with an increased outlay of about Rs 1.21 lakh crore, and completion of ongoing projects. That cost overrun remains a headache comes out clearly from the government figure that for 27 railway projects, the combined estimated cost has now climbed over threefold to Rs 79,140.68 crore from the origil cost of Rs 22,680.85 crore. Apart from delayed project implementation, another looming challenge for Indian Railways will be the massive projected outgo of Rs 28,450 crore to carry out the 7th Pay Commission pay hike recommendation for 26 lakh railway employees and pensioners.

The Railways minister has set an investment target of Rs 1.2 lakh crore this year, 21 percent higher than last year. He hopes to generate Rs 1.84 lakh crore in revenue, stressing on new sources of revenue ‘beyond tariff revenue’. He has also batted for a new way of funding projects through institutiol fincing and going overseas with rupee bonds. In this context, Prabhu has mentioned LIC’s decision to invest Rs 1.5 lakh crore over five years on favorable terms. He also expects the Fince minister to provide Rs 40,000 crore budgetary support this year. As for inviting public-private partnership to develop railway projects, it remains to be seen whether the Railway minister is being over-optimistic. In an obvious bid to inspire confidence among private investors, Prabhu has mooted a law to set up an independent railway regulator to decide tariffs and investment proposals. He has also stressed upon creating a holding company to monetize assets, particularly by leasing out railway land for commercial use and exploring advertising potentials at big stations. To make the Railways more efficient, Prabhu’s budget contains some initiatives for improving railway infrastructure, creating dedicated rail corridors, revamping the suburban railways system and commissioning 2,800 km of new tracks in 2016-17. As for the Northeast, it has to be appreciated that the Railways has been active for over a year in expanding its reach in the region. Prabhu has mentioned connecting Barak Valley of Assam with the rest of the country after the opening of Lumding-Silchar BG section, as well as bringing Tripura on to the BG network by connecting Agartala. After commissioning of the Kathakal-Bhairabi and Aruchal-Jiribam gauge conversion projects, Mizoram and Manipur are also set to come on the BG map. Of the Rs 6,241 crore outlay planned for NF Railway, Rs 4308 crore has been earmarked for laying down new lines. Rs 515 crore has been allotted for track doubling; a coaching termil cum station at Agthori in North Guwahati at estimated cost of Rs 517 crores has been proposed; 306 unmanned level crossings will be manned. For far too long, people of Northeast States have suffered due to rail projects being delayed for years on end. Prabhu’s proposals are surely welcome, provided these are implemented on time.