Friday, February 27

Railway Budget 2015: Prabhu's Apolitical, Practical and Visionary Rail Budget for Aspirational India

Suresh Prabhu entering Parliament before Railway Budget

Shri Suresh Prabhu, Railway Minister, who is also a Chartered Accountant presented his maiden Railway Budget for FY 2015-16, yesterday on 26th February 2015 in the Loksabha. Many of the analysts and economists are terming it as a Practical Budget. The Railway Minister was appreciated for his maiden Railway Budget, in which he preferred to be apolitical, practical and visionary Railway Minister. Here are the key takeaways from the Rail Budget.


Highlights of the Railway Budget 2015-16


Thrust:

1. IR to become prime mover of economy once again.
2. Resource Mobilization for higher Investments.
3. Decongestion of heavy haul routes and speeding up of trains: emphasis on gauge conversion, doubling, tripling and electrification.
4. Project delivery.
5. Passenger Amenities.
6. Safety.
7. Transparency & System Improvement.
8. Railways to continue to be the preferred mode of transport for the masses.
9. Sustainability.

Four goals for Indian Railways to transform over next five years:

a) To deliver a sustained and measurable improvement in customer experience.
b) To make Rail a safer means of travel.
c) To expand Bhartiya Rail’s capacity substantially and modernise infrastructure.: increase daily passenger carrying capacity from 21million to 30 million: increase track length by 20% from 1,14,000 km to 1,38,000 km: grow our annual freight carrying capacity from 1 billion to 1.5 billion tonnes.
d) Finally, to make Bhartiya Rail financially self-sustainable. Generate large surpluses from operations not only to service the debt needed to fund our capacity expansion, but also to invest on an on-going basis to replace our depreciating assets.

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Eleven major thrust areas of Action Plan: Quality of life in journeys:

Cleanliness:- Swachh Rail Swachh Bharat, new department for cleanliness, integrated cleaning by engaging professional agencies and training our staff, ‘waste to energy’ conversion plants, new toilets covering 650 additional stations compared to 120 stations last year. Bio-toilets.

Bed linen: NIFT to design; online booking of disposable bed rolls.

Help-line: 24X7 helpline number 138;toll-free number 182 for security related complaints.

Ticketing: operation five minutes for issuing unreserved tickets, hot buttons, coin vending machines, single destination teller, concessional e-tickets for differently abled travelers, developing a multi-lingual e-portal, crediting of refunds through banks, unreserved tickets on Smart phones, proliferation of automatic ticket vending machines with smart cards and currency options, integrated ticketing system on the lines of rail-cum-road tickets, Defence Travel System developed for elimination of Warrants .

Catering: e-catering to select meals from an array of choices. Ordering food through IRCTC website at the time of booking of tickets; integrating best food chains into this project; setting up of Base Kitchens in specified Divisions to be run by reputed agencies for serving quality food; expansion of water vending machines.

Leveraging technology: Hand-held terminals to Travelling Ticket Examiners (TTEs) for verification of passengers and downloading charts; possibility of extending facility of SMS on mobiles as a valid proof of travel for PRS tickets; integrated customer portal as a single interface to access different services; Introduction of a centrally managed Railway Display Network in over 2000 stations in next two years; “SMS Alert” service to inform passengers in advance of the updated arrival/departure time of trains at starting or destination stations.

Surveillance: surveillance cameras provided on a pilot basis in selected mainline coaches and ladies’ compartments of suburban coaches without intruding into privacy.

Entertainment: project for introducing on-board entertainment on select Shatabdi trains on license fee basis launched; Mobile phone charging facilities to be provided in general class coaches & increased in sleeper class coaches.

Station facilities: 200 more stations to come under Adarsh Station scheme; Wi - Fi to be provided at B category stations ; facility of self-operated lockers to be made available at stations; provision of concierge services through IRCTC at major stations; online booking of wheel chair on payment basis for senior citizens, patients and the differently-abled passengers through IRCTC on select stations.

Train capacity: capacity in identified trains be augmented to run with 26 coaches; more General class coaches be added in identified trains;

Comfortable travel: NID approached to design user friendly ladders for climbing upper berths; increasing quota of lower berths for senior citizens; TTEs be instructed to help senior citizens, pregnant women and differently-abled persons in obtaining lower berths; middle bay of coaches to be reserved for women and senior citizen; NID to develop ergonomically designed seats; introduction of train sets; Provision of Rs. 120 crore for Lifts and escalator which is 76% higher; newly manufactured coaches will be Braille enabled; building wider entrances for the ease of differently-abled passengers; allocation for passenger amenities up by 67% Y-O-Y. Corporate houses & MPs to be requested to invest in improving passenger amenities at Railway stations through CSR & MPLAD funds; Divisional Committees in each Railway to be chaired by Members of Parliament.


Expansion of freight handling capacity
Transport Logistics Corporation of India (TRANSLOC), to be set up for developing common user facilities with handling and value-added services to provide end-to-end logistics solution at select Railway terminals through Public Private Partnerships.


Improving train speed
1. Speed of 9 railway corridors to be increased from existing 110 and 130 kmph to 160 and 200 kmph respectively so that inter-metro journeys like Delhi-Kolkotta and Delhi-Mumbai can be completed overnight.

2. Average speed of freight trains in empty and loaded conditions, will be enhanced to 100 kmph for empty freight trains and 75 kmph for loaded trains; loading density on all major freight bearing routes to be upgraded to 22.82 tonne axle loads.


Technology upgradation

1. Constituting an innovation council called “Kayakalp” for business re-engineering and introducing a spirit of innovation in Railways.
2. Strengthening of RDSO into an organization of excellence for applied research; four Railway Research Centers to be set up in select universities for fundamental research; ‘Malaviya Chair’ for Railway Technology at IIT (BHU), Varanasi to be set up.
3. Consortium of Ministry of Railways, Ministry of Human Resource Development, Ministry of Science And Technology and Industries on to take up identified Railway projects for research.

Social initiatives
1. Infrastructure like stations and training centers to be made available for skill development. Indian Railways personnel and their services also available for this national cause.
2. Promotion of products made by Self Help Groups, consisting mainly of women and youth on the model of Konkan Railway.

FINANCIAL PERFORMANCE 2014-15:
1. Net reduction in Gross Traffic Receipts by Rs 917 crore compared to the BE of Rs 1,60,165 crore.
2. Growth in Ordinary Working Expenses (O.W.E) scaled down to 11.7% as against BE of 15.5% y-o-y. Taking into account the likely savings accruing from drop in prices of HSD (high speed diesel) for traction partly offset by higher requirements under certain heads for maintenance, safety and cleanliness activities, the budgeted O. W. E. of Rs 1,12,649 crore decreased in the RE 2014-15 to Rs. 1,08,970 crore i.e. by Rs 3,679 crore.
3. Appropriation to the Pension Fund has been increased to Rs. 29,540 crore in RE.

Internal resource generation also improved and accordingly the appropriation to DRF has been scaled up to Rs 7,975 crore in RE from the BE 2014-15 provision of Rs 7,050 crore. 

After taking into account the above, "Excess" of receipts over expenditure stands at Rs 7,278 crore in RE 2014-15 reflecting better financial management.

Plan size for 2014-15 increased from Rs 65,445 crore in the B.E to Rs 65,798 crore in the Revised Estimates i.e. by Rs 353 crore with higher provisions under internal resource component and market borrowings for rolling stock requirement.

Budget Estimates for 2015-16


1. The intention is to capture increased revenues and ensure appropriate investments so as to decongest the system and enhance line-capacity.
2. Passenger earnings growth pegged at 16.7% and target budgeted at Rs. 50,175 crore.
3. Freight traffic is pegged at an all time high incremental traffic of 85 million tonnes, anticipating a healthier growth in the core sector of economy; Goods earnings proposed at Rs. 1,21,423 crore which includes rationalisation of rates, commodity classification and distance slabs.
4. Other coaching and sundries are projected at Rs. 4,612 crore and Rs. 7,318 crore.
5. Gross Traffic Receipts estimated at Rs 1,83,578 crore , a growth of 15.3%.
6.Ordinary Working Expenses proposed to grow at 9.6% over RE 2014-15. Traction fuel bill anticipated to shrink further.  Higher provisions made for safety maintenance and cleanliness. Lease charges, interest component of the current and previous market borrowings, at a growth of 21%.
7. Appropriation to Pension Fund proposed at Rs 35,260 crore and appropriation to DRF at Rs 8,100 crore. Appropriation of Rs 7,616 crore proposed to be made to Capital Fund for payment of principal component of lease charges to IRFC.



Fare/Freight Hike
1. No changes in Passenger fares.
2. The railway minister has proposed a freight hike of 0.8% on iron ore and steel, a 6.3% increase on coal movement and an increase in freight rate for grains and pulses by 10% in fiscal 2015-16 that begins in April.


Sources:
1. PTI
2. Indian Railways Website
3. Money Control
4. Financial Express

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