This Article is From Jul 08, 2014

Rail Budget: Gowda Seeks FDI Nod, Periodic Fare Revision

Rail Budget: Gowda Seeks FDI Nod, Periodic Fare Revision
Railway Minister Sadananda Gowda on Tuesday said that his government will focus on completing old projects rather than announcing new projects as is the norm. Mr Gowda, who presented his maiden Rail Budget, said populist projects and mismanagement have brought railways to point of funds crunch and this state of affairs needs immediate course correction. The Indian Railways will target to become the largest freight carrier in the world, he added.

Here are some highlights of the Rail Budget

  1. Poor financial health: The railways' operating ratio has increased from 76 per cent in 2007-08 to an estimated 93.5 per cent in 2013-14. It currently use 94 paise out of every rupee earned towards expenses, leaving little surplus funds for infrastructure development. Railways' surplus is estimated to come down to Rs 602 crore in FY15 from Rs 11,754 crore in FY08.

  2. Focus on completing projects: In the last 30 years, as many as 676 projects were sanctioned worth Rs 1.58 lakh crore. 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 lakh crore.

  3. Way ahead: For financial year 2014-15, the government is targeting revenues of Rs 1.64 lakh crore, while expenses are likely to be Rs 1.49 lakh crore. A 12.9 per cent growth expected in traffic receipt. Freight target is expected to grow by 4.9 per cent.

  4. Plan outlay: The current year's plan outlay is the highest ever at Rs 65,445 crore. A large part of this higher plan outlay will go to safety related works. Market borrowing will be scaled down to Rs 11,790 crore.

  5. Periodic revision in rail fares and thrust on carrying more freight: The loss in passenger fares has gone up from 10 paise per passenger km in 2000-01 to 23 paise in 2012-13. Last month's fare revision will bring in Rs 8,000 crore, but periodic revision in rail fares needs to take place and will be linked to revision in fuel price. Railways, which carried 31 per cent of the country's freight, will target to become the largest freight carrier in the world.

  6. FDI in railways: The government will require Rs 5 lakh crore in 10 years for modernization. To mobilise resources, the railways will explore alternative sources of resources to finance infrastructure projects. The minister sought Cabinet's nod for foreign direct investment (FDI) in railways. The FDI will be used for infra development and not for rail operations.

  7. PPP route for big projects: Railways will leverage rail PSU resources to raise additional funds. The government will also take up bulk of future projects, such as high-speed trains, through public private partnerships. The minister added that a planned tax holiday scheme, which will incentivize investments for railways projects that have a long gestation period will also be promoted. The government will focus on aggressive indigenization.

  8. Bullet train soon: The government will start the Mumbai-Ahmedabad bullet train as early as possible. The Diamond Quadrilateral of high-speed trains, a top priority of the Modi government, has been allocated Rs 100 crore in the current plan. The government requires Rs 60,000 crore for introducing one bullet train alone. Trains on DQ route will run at speeds of 160-200 km in nine select sectors. The government needs Rs 9 lakh crore for golden quadrilateral project.

  9. Passenger amenities: Indian Railways to set up food courts at major railway stations. Budget allocation for cleanliness up by 40 per cent over the last year. Future e-Ticketing to support 7200 tickets per minute and to allow 1.2 lakh simultaneous users. Some stations to be developed to international standards through PPP model. Parcel traffic to be segregated to separate terminals to make passenger traffic unhindered. Office-on-Wheels; internet and workstation facilities on select trains. Aim to enable buying of platform, unreserved tickets online.

  10. New trains: Railways to run 5 Jansadharan Trains, 5 Premium Trains, 6 AC Express Trains, 27 Express Trains, 8 Passenger Trains, 2 MEMU services and 5 DEMU services