Fresh air in Railway Budget

Railway Minister Suresh Prabhu’s maiden Budget is different from most past budgets. It is for the first time that there is no announcement of new trains and new lines in a Budget. Since most such decisions have been based on political considerations and not on genuine public need or commercial viability, a Budget without them would not be a wrong one. In fact, the railways will not be able to complete in the coming many years the projects announced in the last few years. The focus of Prabhu’s Budget is on the safety, convenience and amenities of passengers, and the thrust is on what can be achieved in the long term rather than in one year. There is no hike in fares, perhaps because they were increased last year. Safety measures like cameras in women’s compartments and improvements in cleanliness, catering and reservation facilities are welcome, and required. The need for speedier travel has also been envisaged. These have been promised in the past too, without much to show for performance. 

The changes in freight rates may not be of much consequence in terms of revenue. The Budget does not mention their impact but they will make some basic commodities like steel and cement costlier. The minister himself said that the Budget is more a policy statement about the direction of the railways in the next five years than a projection of income and expenditure in the coming year. The plan outlay is pegged at Rs 1,00,011 crore, which marks an increase of 52 per cent. But the Budget is again different, as it does not seek additional support from the finance ministry. The railways need Rs 8.5 lakh crore for infrastructure development, modernisation and upgrade of its facilities in the next five years. It is not specified where the money will come from but the minister has indicated that it could come from insurance and pension funds, foreign sources and from PPP arrangements.

An annual Budget cannot lay down a clear road map to salvage a huge network like the Indian railways, stuck in deep financial straits. The minister has assured that it will remain a national asset and ruled out privatisation, though some aspects of its functioning may be made more efficient with private participation. He has set four goals: better customer experience, safer travel, modern infrastructure and financial sustainability. He has spelt out some steps for the first two and cast his eyes long on the last two. It will be a difficult haul even with all the drivers he has mentioned to support the long-term plan.