Rail Budget 2015-16: Resourcing Railways
Intro: Union Railway Minister Suresh Prabhu has unveiled a comprehensive plan for Modernisation of Indian Railways and to improve the customer experience in the Railway Budget 2015-16.
It is a forward-looking & strategy-oriented budget with an innovative approach. Hon’ble Minister has correctly focused on building partnerships, leveraging additional resources, revamping management practices for much-needed governance and transparency. In particular, action plan reflect a smart thought process.
—Dr A Didar Singh, General Secretary, FICCI
Departing from the politics of addressing own constituencies through budget, Railway Minister Suresh Prabhu has unveiled a plan for modernisation of Railways with national perspective. The Railway Budget 2015-16 is designed to make the Indian Railways one of the key drivers of the India Growth Story. In his maiden budget Railway Minister has aimed at strengthening railway finances by a reduced operating ratio. Two, striking that fine balance between good politics and good economics. And three, a vision that transforms an organisation into a transporter that can support a fast-growing modern economy.
Immediately after the announcement of the Rail Budget 2015, Prime Minister Narendra Modi tweeted: “Rail Budget 2015 is a watershed moment for Railways, marking a paradigm shift from discussing coaches and trains to comprehensive railway reform. I am particularly delighted that for the 1st time there is a concrete vision for technology upgradation and modernisation of the Railways.”
This tweet sums up the essence of the Rail Budget, which for the first time has taken a bold step and not the populist one like in the past by not announcing any new trains. The Railway Minister Suresh Prabhu has also not increased rail fare.
Immediately, after presenting the Budget, the Railway Minister told DD News, “I didn't announce new trains in budget since that can be done at any time. The railway budget should be a policy statement and should serve as a guide.”
Prabhu presented a forward looking, futuristic and passenger-centric Budget, combining a clear vision and a definite plan to achieve it. This Budget lays out a clear roadmap to make the Railways the key driver of India's economic growth and playing a key role in India's progress. It stands out for its focus on the common man, putting speed, scale, service and safety—all on one track.
In this budget, Prabhu has embraced technology firmly. From mobile charging facilities in general coaches and Wi-Fi at 400 stations to online booking of retiring rooms and wheelchairs, Prabhu has also ensured that ticket booking could be done in five minutes. This will bring a big relief to the common man. Keeping with the promise of the PM to North East states during General Election 2014, this Budget has ensured greater connectivity to North-Eastern region and coastal areas.
It is encouraging to see that the Rail Budget has envisaged an investment of Rs 8.5 lakh crore in next five years that would be mobilised from sources such as multilateral development banks and pension funds. Also commendable is the strategy for leveraging partnership with States, PSUs, private sector and other stakeholders towards gaining access to long-term financing & technology, improving last mile connectivity, expanding fleet of rolling stock and building railway infrastructure and modernising station development.
Besides putting thrust on better passenger amenities and safety, the budget has targeted operating ratio at 88.5 per cent for 2015-16 as compared with 91.8 per cent in 2014-15, and the best in last 9 years. Lower operating ratio would help in generating higher internal resources for meeting various requirements.
Terming the Rail Budget as “pragmatic”, India Inc has welcomed the larger role envisaged for the private sector and said various measures proposed would bring in higher efficiency and improve ease of doing business.
Alok B Shriram, President, PHD Chamber of Commerce and Industry said that, “The most pragmatic Budget, as it focuses on delivering a sustained and measurable improvement in customer experience, capacity expansion of passenger and freight through network expansion and proposed action plan for the next five years. Five years action plan is encouraging and Railways will become a prime mover of the Indian economy, going forward.”
While recognising that under-investment has been a persistent problem in the Indian Railways, the honourable Minister Suresh Prabhu unveiled a comprehensive plan for modernisation of the Railways and improving the customer experience. The Minister also suggested several innovative financing mechanisms including setting up special purpose vehicles for raising long-term investment from pension funds and multilateral agencies. He set an ambitious target of investing Rs 8.5 lakh crores in the Railways over the next five years. This would result in a truly modern rail system which would significantly propel economic growth.
The budget has introduced a number of innovative measures to increase revenue. The roadmap laid for attracting private investment through tapping low cost long-term funds from insurance, multi-lateral and bilateral agencies; creating new vehicles like a holding company to raise long-term debt to induce investment will go a long way in boosting the cash strapped sector.
The budget is considered as a forward-looking, pragmatic and strategy-oriented budget with an innovative approach. We are confident, the proposed measures and initiatives, if executed and implemented effectively, will go a long way to restore the prime place for railways in our national economy by the industry experts and has correctly focused on building partnerships, leveraging additional resources, revamping management practices, systems & processes, and setting standards for much-needed governance and transparency. In particular, very clear and lucid articulation of 4 goals, 5 drivers and 11 thrust areas of action plan reflect a smart thought process.
While recognising that under-investment has been a persistent problem in the Indian Railways, Prabhu unveiled a comprehensive plan for modernisation of the Railways and improving the customer experience. Minister also suggested several innovative financing mechanisms including setting up special purpose vehicles for raising long-term investment from pension funds and multilateral agencies.
An ambitious target of investing 8.5 lakh crores in the Railways over the next five years. The budget has introduced a number of innovative measures to increase revenue.
The mordernisation and innovative measures introduced in the Railway Budget 2015-16 will result in a truly modern rail system which would significantly propel economic growth of India. —Organiser Bureau