UTOPIAN RAILWAY BUDGET - IF ONLY ALL THIS COULD BE IMPLEMENTED.....

By Ruma Dubey

Every Budget seems to be more of a political statement rather than about finances and economics. The Budget has become a platform to score votes, two hoots to economic sense! Ditto for the Railway Budget presented today.

Given the significance of the Indian Railways in the Indian economy, this Budget should have been extremely important for the market. But it was more like a get-it-over-and-done-with event.  Freight rate was hiked recently from 7 to 10%. Thus for India Inc, it was more or less a non-event, even before the Budget was over, the market had seemingly moved on while analysts continued to pour over the fine print.

As expected it was about more about ambitious projects; all very rhetoric and adrenalin pumping but the crux is that – it just did not seem real, all very ideal, almost like a wish list. There has been no increase in passenger fare since 2002-03 and but this first-time Railway Minister took the plunge and increased passenger fares very nominally – 2 paise/km for suburban travel, 10 paise/km for AC coach and 30 paise/km for first class AC coach. This small hike is not expected to even take care of the hike in fuel prices. But at least he broke the taboo of not hiking passenger fares!

The maiden Budget by Dinesh Trivedi, was surprisingly interesting. As there were no real expectations, the pleasant speech of Mr.Trivedi, was a welcome change over the last fiscal’s speech by Mamata Banerjee yet nowhere close to the earlier enthralling speeches by Lalu Prasad Yadav.  Interspersed with poetry, his most memorable quote will certainly be, “Just as we cannot imagine India without Himalayas, just as we cannot imagine India without Ganga, similarly, we cannot imagine India without Indian Railways!”

The Railway Minister had a five prong plan - Safety, consolidation, modernization, decongestion and bring down the operating ratio from 95% to 84.95% in 2012-13 and to 72% in 2016-17. Sounded great but that’s all it seemed to be about – good sound bites!

Some of the plans, were indeed very innovative and current with times – like plans to manufacture 2100 specially designed coaches to meet needs of the differently abled; aim to provide one such coach in each express train, installation of Green toilets in 2500 coaches in next one year, e-auction of scrap; setting up of new housekeeping body for stations and trains to improve hygiene; SMS alerts; introduction of alternate train accommodating system, satellite based real time information. Wow! It all sounded very ideal but sadly, given the past track record, no one is convinced that these could get implemented effectively.

The Budget had a lot in terms of safety, modernization and even for hygiene, but where the money will come for all these seemingly Utopian plans, it was not chalked out. All the plans were long term but immediate plans?  It all sounded very ideal but there was not much in terms of clear cut plans, with no budgets. He wants to bring down the operating ratio to 74% by 2016-17 but how? Once again, it seemed it was all talk, with nothing really expected to come forth. If one were gullible enough to believe the Minister, well, one could get excited and feel that Indian Railways could actually become as good as the EuroRail!

As mentioned, the markets have moved on, back to focus on Credit Policy tomorrow and then the D Day – the Union Budget.

A quick highlight of the Railway Budget 2012-13

• Ø  Passenger fare hikes - 2 paise/km for suburban travel, 5 paise/km for sleeper class; 10 paise/km for AC coach and 30 paise/km for first class AC coach; platform ticket at Rs.5
• Ø  Plan to eliminate all unmanned railway crossings within next 5 years; to set up SPV for the same
• Ø  To set up independent Railway Safety Authority; research unit
• Ø  To plough back dividend of Rs.20,000 crore for modernization
• Ø  To introduce 21 new passenger trains and 75 new express trains
• Ø  Eighty-five new line projects to be taken up in FY13
• Ø  To install security systems across 202 stations
• Ø  lan to provide rail connectivity to Nepal and Bangladesh
• Ø  More than 1 lakh proposed to be recruited in 2012-13
• Ø  Require Rs 14 lakh crore over next 10 years to fund projects
• Ø  To facilitate running of longer and heavier freight trains
• Ø  To electrify 6500 kms of line in 12th Plan
• Ø  Rs.5.06 lakh crore investment planned for 5 year modernization plan
• Ø  Recommendations of Kakodkar Committee for safety to be implemented
• Ø  Expects Rs.2.5lakh crore as Budgetary support  from Govt in 12th Plan
• Ø  3000 requests for enhancing amenities; 646 requests for new trains
• Ø  487 approved projects at various levels of execution
• Ø  Market borrowing through IRFC seen Rs.50,000 crore for FY13; FY13 outlay at Rs.60,100 crore
• Ø  Aim to upgrade 19,000 kms  of tracks over next five years; 80% of traffic is on these tracks
• Ø  Aim Railway to contribute to 2 - 2.25% to GDP v/s  1% currently
• Ø  Signaling system to be modernized;  Rs.39,110 cr to be spent on the same
• Ø  To spend Rs 63,212 crore on track modernization in 5 years
• Ø  Development of new railway coach making facility to come up at Panvel, Navi Mumbai
• Ø  Development of 1000 new stations via PPP route; to create 50,000 jobs
• Ø  Loading targets cut due to ban on Iron ore exports
• Ø  Delhi-Kolkata travel time to be brought down to 14 hours from 17 hours
• Ø  To introduce double decker container trains
• Ø  To complete 45 new lines in FY 13; Doubling of lines of 750 kms will be completed in FY12-13
• Ø  17 gauge conversion projects will be completed in FY 12-13; 825 kms of gauge conversion projects to be completed