* Budget futuristic, passenger-centric: PM
NEW DELHI, Feb 26:
The Railway Budget today hiked freight rates on cement, coal, foodgrain and pulses, urea, kerosene and LPG by up to 10 per cent to mop up an additional Rs 4,000 crore a year but spared passengers from any raise in fares while ruling out privatisation.
Presenting his maiden budget, the first full-fledged exercise of the Modi government, Railway Minister Suresh Prabhu did not announce any new trains or lines pending a review but said he would concentrate on consolidating the existing ones.
“I have not increased the passenger fares,” he announced at the outset of his hour-long budget speech and made no mention of the rationalisation of freight rates that was done by a sleight of hand through an explanatory memorandum.
The hike, which will be effective from April 1 this year, will cover a wide-range of items like cement, coal, grains and pulses, urea, iron ore, kerosene and LPG.
While common salt has been left untouched, in the case of diesel and limestone there will be a marginal reduction in the freight adjustment done through re-classification of goods and distance rationalisation.
At the post-Budget briefing, Prabhu sought to justify the exercise saying rationalisation has always been done while Member (Traffic) Ajay Shukla was at pains to project that on some goods actually there will be reduction in freight on longer distance.
Minister of State for Railways Manoj Sinha said there will be no increase in the prices of urea for farmers since the Government will be subsidising the commodity.
But officials estimated an additional revenue mobilisation of Rs 4,000 crore a year on account of freight increase. Industry associations estimate Rs 3,000 crore subsidy burden on movement of urea and Rs 600 crore on foodgrains.
Carriage of grain and pulses as well as urea will suffer a 10 per cent hike in freight while coal will attract a 6.3 per cent increase.
In a Budget that had no big bang announcements but aims at providing more facilities, Prabhu unveiled 11 major thrust areas to improve cleanliness, better bed linen, helpline for ensuring security including camera surveillance for women safety, ticketing and e-booking of meals of choice.
Onboard entertainment on select Shatabdi trains, provision of wi-fi in B-category trains and 200 more stations to be brought under Aadarsh Station Scheme were some of the passenger amenities that the Railway Minister announced.
The Budget envisages an investment of Rs 8.5 lakh crore in the next five years to be mobilised from multiple sources to cater to funding through multilateral development banks and pension funds.
It hiked the plan outlay for 2015-16 by 52 per cent to Rs 100,011 crore over the revised estimate of 2014-15. Passenger earnings growth has been pegged at 16.7 per cent and earnings target budgeted at Rs 50,175 crore.
Goods earnings is accordingly proposed at Rs 1,21,423 crore, which includes rationalisation of rates, commodity classification and distance slabs.
Against the backdrop of talk of privatisation of railways, the Minister said Railways will continue to be a precious national asset and people of India will own railways always.
The other thrust areas include efforts to make Railways the prime mover of economy again, resource mobilisation for higher investments, decongestion of heavy routes and speeding up of trains, passenger amenities and safety.
Other coaching and sundries are projected at Rs 4612 crore and Rs 7318 crore. Gross traffic receipts are estimated at Rs 1,83,578 crore, a growth of 15.3 per cent.
Referring to the Rs 8.5 lakh crore investment over five years, Prabhu said a broad indicative investment plan has been prepared.
“But the scale of investment needs is such that it will require us to seek multiple sources of funding. We will tap other sources of finance. Multilateral development banks and pension funds have expressed keen interest in financing new investments.
“They seek sources of predictable and recurring revenue, which we can provide through the issuance of long debt instruments to fund revenue-generating railway projects,” the Minister said.
The cleanliness project includes new toilets covering 650 new stations, bio-toilets, national fashion technology to design bed linen, online disposal of bed rolls.
On passenger facilities, the Budget extended the window for advance booking of tickets from 60 to 120 days.
An ‘Operation five minutes’ will be introduced for issuing unreserved tickets besides other initiatives like hot buttons, coin vending machines and concessional e-tickets for differently-abled passengers.
E-catering will be launched for select meals from an array of choices, ordering food through IRCTC websites at the time of booking tickets and integrating best food chains into the project.
The Rail Minister set four goals to transform the national transporter over the next five years. These include delivery of a sustained and measurable improvement in customer experience and to make rail a safer means of travel.
It also includes expansion of railways’ capacity substantially and modernise infrastructure (increasing daily passenger carrying capacity from 21 million to 30 million; increase track length by 20 per cent from 1,14,000 kms to 1,38,000 kms; growth of annual freight carrying capacity from 1 billion to 1.5 billion tonnes).
Making the railways financially self-sustainable is also one of the goals. For this, large surpluses are to be generated from operations, not only to service the debt needed to fund capacity expansion, but also to invest on an ongoing basis to replace depreciating assets, Prabhu said.
Giving details of investments segment-wise, Prabhu earmarked Rs 1,99,320 crore for network decogestion, including DFC and electrification.
Rs 1,93,000 crore were earmarked for network expansion, Rs 39000 crore for national projects (North Eastern and Kashmir connectivity projects) and Rs 1,27,000 for safety (track renewal, bridge works, road overbridge, road underbridge, and signalling and telecom).
Rs 5000 crore was allocated for information technology/ research, Rs 1,02,000 crore for rolling stock (locomotives, coaches, wagons production and maintenance), Rs 12,500 crore for passenger amenities, Rs 65,000 crore for high speed rail and elevated corridor, Rs 1,00,000 crore for station redevelopment and logistic parks.
Under the ‘Operation 5-minute’ facility, ticketless passengers can get regular tickets within five minutes of entering station.
Other steps include making railway helpline number 138 operational 24×7, toll-free number 182 for security-related complaints and CCTVs in select trains for women safety.
SMS alert service is to be introduced to inform passengers about train arrival/departure, while wi-fi facility would be introduced at 400 railway stations.
Rail-cum-road ticket is to be extended to many stations and more trains are proposed to be added under scheme for ordering food while booking tickets.
More general class coaches are to be added in identified trains and more air-conditioned EMU services would be introduced on Mumbai suburban section.
Projects worth Rs 96,182 crore to be undertaken to expand capacity of 9,420 km rail lines.
Feasibility report of high speed train between Mumbai and Ahmedabad is expected by middle of this year, the Minister said.
Four dedicated freight corridors are to be completed this year, while 6,608 kms of track are to be electrified, he said.
Wagon-making scheme is to be reviewed to make it easier for private investment, he said.
Speed on nine corridors is to be increased from 110-130 to 160-200 kms per hour respectively, Prabhu said.
A 5-year corporate safety plan is to be ready in three months to identify annual quantifiable targets.
Hailing the Rail Budget as “futuristic” and “passenger-centric”, Prime Minister Narendra Modi today said it touches all aspects of development and lays out a clear roadmap to make the national transporter the key driver of the country’s economic growth.
He said the budget is a watershed moment for the railways, marking a paradigm shift from mere announcement of number of trains to a comprehensive railway reform.
Modi highlighted that without raising the passenger fare, the Government has earmarked Rs 8 lakh crore for development and modernisation of the railways.
“Rail Budget 2015 is a forward looking, futuristic & passenger-centric budget, combining a clear vision & a definite plan to achieve it,” Modi tweeted.
“I am particularly delighted that for the 1st time there is a concrete vision for technology upgradation & modernisation of the Railways,” he said in another tweet.
“Rail Budget lays out a clear roadmap to make the Railways the key driver of India’s economic growth & playing a key role in India’s progress,” he said.
The Prime Minister said the budget stands out for its focus on the common man, putting speed, scale, service and safety, all on one track.
“All aspects of development have been covered,” Modi said later in a televised reaction.
He said the budget provides for value and “respect” to common people’s money as it will be utilised properly.
“The budget envisages increase in speed of trains, technology upgradation and new initiatives for overall development of the railways,” the Prime Minister said.
Modi referred to the provisions like security of women and good food and said thrust has been laid on providing an environment of comfort and all kinds of facilities.
“For the first time, the Railway Minister has earmarked Rs 8 lakh crore without raising the passenger fare,” the Prime Minister said, adding the exercise is unparalleled in the annals of Indian Railways.
He said the Railway Minister has not stopped at just setting up a helpline and giving passenger amenities but has also focussed on how to create world-class railway stations with 20-storey building with all amneties.
Modi also talked about the yearning among the youth for employment in the railways and said the process for it lacks transparency.
The budget is an important step towards putting in place a corruption-free system, he added.
Meanwhile, prices of food grain, pulses, cement, coal and steel are likely to go up following the proposal to hike rail freight by up to 10 per cent for various commodities.
The Railway Budget proposals, presented by Union Minister Suresh Prabhu in Parliament today, proposed a hike in freight rates for 12 commodities in the range of 0.8 per cent to 10 per cent.
The increase in freight charges by 10 per cent on urea is also expected to add to the subsidy burden.
“With the increase in freight, the subsidy paid for movement of urea will increase by another Rs 300 crore from current level of Rs 3,000 crore,” Fertiliser Association of India (FAI) DG Satish Chander said.
The proposed freight hike for cement, coal, iron and steel, grains & pulses, groundnut oil, LPG and kerosene is 2.7 per cent, 6.3 per cent, 0.8 per cent, 10 per cent, 2.1 per cent, 0.8 per cent and 0.8 per cent respectively.
“Our cost of production will go up in the range between Rs 2 and Rs 4 per bag of 50 kg cement,” Dalmia Bharat Cement Group CEO Mohendra Singi said.
When asked whether the company would raise the prices, he said: “The price is a factor of demand and supply, so we will take a call on this later.”
Further, a leading cement maker said the prices of cement bags may go up in the range of between Rs 5 and Rs 10 per bag following the hike in freight rate on coal, steel and cement.
Meanwhile, there was a mixed response from steel companies which said the proposed Rs 8.5 lakh crore investment in Railways in the next five years would spur demand for steel, but that they were a bit disappointed as the Minister did not lower freight rates despite lower diesel prices now.
“The freight hike in the Budget on iron and steel will have little impact on us,” spokesperson of a leading steel firm said. Prabhu has also proposed to raise freight rates for iron ore meant for domestic use by 0.8 per cent.
On urea, Fertiliser Minister Ananth Kumar said despite the increase in freight rates, there will not be any increase in urea prices.
“We will continue to provide urea at the same rate of Rs 5,360 per tonne. It will only increase subsidy on urea”.
The Railway Minister did not term the freight increase in some commodities as a hike, saying it is part of the ongoing re-classification of commodities that will reduce freight rates in certain sectors and may increase in others.
Minister of State for Railways, Manoj Sinha, said that there will not be any increase in urea prices for farmers.
However, for limestone, dolomite & manganese and speed diesel oil the rates have been reduced by 0.3 per cent and 1 per cent respectively.
The Railways Minister has also proposed to raise the base freight rates by up to 10 per cent.
Suresh Prabhu’s maiden Railway Budget presentation, peppered with personal references and quotes, turned out to be a smooth affair even as possibly for the first time, no new trains were announced today.
In a reflection of the challenging tasks before him, the Minister remarked, “Hey Prabhu, ye kaise hoga? (Oh God, how can this be done?),” while spelling out his long term vision for transforming the railways.
Without leaving any room for doubt, the Minister was quick to complete his remarks saying that large resources and strong political will ensure “re-birth of the railways”, evoking peals of laughter across the House.
In yet another achievement of sorts, Prabhu did not encounter any major disruption from opposition during his speech.
Only when he urged Members of Parliament to contribute from their MPLADS (Member of Parliament Local Area Development Scheme) funds to improve passenger amenities at railway stations, was there some dissent with some Opposition members saying “no,no…”.
Towards the end of his speech, Opposition members seemed to be a disappointed lot as the Minister did not announce any new trains.
Looking to make his speech more lively, 61-year old Prabhu, also referred to himself as a “senior citizen” while mentioning about a proposal to give preference to senior citizens for middle berths in trains.
Besides, he used quotes such as “Kuch naya jodna hoga, kuch purana todna hoga (some new things need to be added, some old things need to be broken)”.
In a lighter moment, looking towards his ministerial colleague Nitin Gadkari, Prabhu said the railways are more energy efficient and emit less carbon dioxide compared to road transport. Gadkari, who is the Transport Minister, was seen nodding at the reference. He was seated next to the Railway Minister.
Members on the Treasury benches were seen thumping their desks intermittently during the little over an hour-long speech of the Railway Minister.
The speech also saw the mention of a Marathi novel ‘Khandalyachya Ghatasaathi’, penned by Shubhada Gogate, which which is a fictionalised account of the construction of India’s first railway line across the Sahyadri range.
Besides, Prabhu referred to Mahatma Gandhi conducting his Bharat Darshan by travelling in ‘Third Class’ of trains, which does not exist today. The Minister concluded his speech by quoting Swami Vivekananda on making ideas work.
Prime Minister Narendra Modi and Congress leader Sonia Gandhi, Finance Minister Arun Jaitley, among others, were present in the House while the visitors’ gallery was almost full. (PTI)
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