What to expect from Railway Budget 2015

| Thursday, February 26, 2015 - 11:16
First Published |

With Railway finances under terrible strain, all eyes will be focused on whether Railway Minister Suresh Prabhu will hike the fares and freight rates in the Rail Budget on Thursday which may contain proposals for 'Make in India' initiatives besides enhancing safety and security.

Minister of State for Railway Manoj Sinha had earlier ruled out a reduction in fares in the context of lowering of diesel rates but Prabhu is expected to make a tight rope walk as he tries to bridge the huge gap in finances while presenting his maiden budget in the Lok Sabha, lower house of Indian parliament.

Prabhu is likely to unravel his grand plans of how to decrease the cross-subsidy for passenger service from freight earnings which is touching Rs 24,000 crores and the steps to increase goods transportation share in the national transporter with or without hiking fares.

For 10 years before 2012-13 there was no increase in rail fares. Then Railway Minister and Trinamool Congress leader Dinesh Trivedi had made an across-the-board hike in 2012-2013 but was made to roll back the hike in second and sleeper class categories.

Since then there have been hikes in passenger fares. In the first Railway budget of the Modi government in July last, fares were increased by 14.2 per cent and freight by 6.5 per cent.

Though there is a decrease in diesel price, electricity cost has gone up by over four per cent making it a balancing act for the fuel adjustment cost (FAC)-lnked tariff revision policy adopted by railways since 2013.

Currently there are 676 projects worth Rs 1,57,883 crore sanctioned and out of these, only 317 projects could be completed and 359 projects remain to be completed which will now require as much as Rs 1,82,000 crore.

Considered a reformer, Prabhu may lay the road map for attracting private investment for the public transporter, which badly needs funds for completion of many crucial rail projects.

Given the funds constraints, he is likely to go slow in announcing new trains and projects in the budget.

Funds allocation will be made only for those projects including new lines which are strategically crucial, doubling and route electrification which are nearing completion, the sources said.

Besides seeking increased gross budgetary support of about Rs 50,000 cr for the 2015-16 fiscal, railways have sought Rs 20,000 cr from the Finance Ministry as railway safety fund to do away with unmanned level crossings, a major reason for train mishaps across the country.

Prabhu will announce joint venture mechanism for implementing projects involving state governments and other external agencies.

As the railway minister has stressed on improvement in passenger amenities before increasing fares, there will be a series of measures including utilisation of CSR funds to improve amenities at rail premises.

Prabhu is expected to focus on tapping more revenue channels and could announce some innovative ways for raising resources through non-tariff methods like increasing revenues from advertisements and leveraging surplus land among others.

In line with the 'Swachh Bharat' campaign, Rail Budget is likely to give special attention on cleanliness exercise and a slew of measures like provision for dustbins in all coaches besides proposal to cover 100 more trains under 'On Board Housekeeping Services'.

Bio-toilets in trains and stations will be covered under the Clean Train Station Scheme.

Keeping with the NDA government's bullet train promise, Prabhu could announce the way forward for the ambitious high-speed train project between Mumbai-Ahmedabad and survey programmes for the proposed diamond quadrilateral route.

The budget could also announce the much-awaited plan to procure 20 train sets for operating on the Rajdhani and Shatabdi routes to reduce travel time.

The budget is likely announce plans for manufacturing coaches to run at a 200-km per hour speed at its Chennai facility in keeping with the Modi government's 'Make in India' initiative.

Redevelopment of about 100 stations, leveraging empty spaces for construction of marketing complex and other commercial projects are also on the cards.

Introduction of AC rakes in the inter-city services to make the journey more comfortable will also be proposed in the Rail Budget 2015-16.

Manufacturing of many locomotive components like cranks shaft, alternators and forged wheels will also be proposed to be undertaken indigenously instead of importing these parts from outside as part of 'Make in India' campaign.

Prabhu, in his bid to make the railways disabled- friendly, is likely to make a proposal to provide for Braille signages in all new coaches to facilitate vision-impaired passengers.

Customer satisfaction will be a focus area of this year's Rail Budget as a series of steps including air-conditioning of Diesel Electric Multiple Unit (DEMU) trains for inter-city services and noise reduction in diesel locomotive cabs are likely to be proposed, the sources said.

In order to promote north-east connectivity, Prabhu will also announce introduction of DEMU services in north eastern states as a national project.

Since many premium trains with higher fares have been introduced to boost revenue collection, the railways will undertake an exercise for upgrading of coach interiors including redesigning user-friendly toilets.

National Institute of Design (NID) is likely to be roped for redesigning the interiors of coaches.

Railways is likely to propose the use of radio-frequency identification tags in its upcoming budget for tracking and tracing of wagons, coaches and locomotives even as the public transporter looks to leverage information technology in a big way to improve services.

Rail Budget 2015-16 is expected to propose extensive use of IT systems in everything from the management of rolling stock to the development of Apps for passengers and provision for Wi-Fi on rail premises.

The Railway Minister is likely to spell out plans for joint venture mechanism for implementing projects involving state governments and other external agencies.

A committee led by former Banking and Financial Services Secretary D K Mittal, constituted by Prabhu, has already submitted recommendations for the new fund raising and revenue models like running of trains like Haldiram Express, Coca Cola Express.

Use of solar energy in a big way, launching of waste-to-energy project and proliferation of CNG in train operations are some of the green initiatives likely to be announced in the Rail Budget this time.

Besides an elaborate exercise of water conservation including setting up of water recycling plants will also be announced by Prabhu in his budget address on February 26.

According to sources, the coming Rail Budget will have detailed action plan consisting of long and short-term measures.

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