Rail Budget 2015_ Right intent, way forward still unclear.pdf
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Transcript of Rail Budget 2015_ Right intent, way forward still unclear.pdf
12/29/2015 Rail Budget 2015: Right intent, way forward still unclear
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MG ARUN @mgarun1
MONEY | 3-minute read | 26-02-2015
One of the highlights of railway minister Suresh Prabhu's Rail Budgetspeech, which was peppered with humour, was his invocation of God bypunning on his own surname. "Our priority is to improve the capacity in thehigh density section. But I thought, Hey Prabhu (Oh God), how will ithappen?" he said. That sort of summed up the humongous nature of thework at hand, with so little resources at his disposal.
The government will pump in Rs eight lakh crore into the Railways over thenext five years. That may not be a big figure when one considers its revenues Rs 1,39,338 crore in 201314, and growing over 10 per cent annually. Butthe key figure to watch for is the net profit Indian Railways made in the sameyear a paltry Rs 602 crore. Just for comparison, another public sector firm,Oil & Natural Gas Corporation had revenues of Rs 90,602 crore in the samefiscal, but its net profit stood at over Rs 22,000 crore. That clearly means the
Rail Budget 2015: Right intent, way forward stillunclearRaising the giant resources needed to revamp the railways will be key to thebehemoth's turnaround.
12/29/2015 Rail Budget 2015: Right intent, way forward still unclear
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transport behemoth is losing a substantial part of its earnings in operatingcosts and in subsidising passenger fares, and therefore, is struggling toremain profitable.
Just as many of his predecessors, Prabhu has also proved he has no alibi forthe PSU's ills, nor is he keen to announce any big bang reforms that maysound bombastic but will add little value. It is pertinent that he has decidedto forego Prime Minister Narendra Modi's pet dream of bullet trains, sincehe realises it will be an unviable exercise that will drain the exchequer, butrather focus on something as basic as improving the lot of the traveller. So hethrows in a smattering of better services such as more biotoilets, seatreservations for women and the elderly, mobile charging facilities in generalcompartments, promises of better catering, faster ticket dispensation and soon.
He has also been prudent not to further burden the existing network withmore trains without improving the lot of the existing ones, or weigh downthe exchequer with any cut in passenger fares. He has, however, taxed theindustry by a hike in freight rates for urea, cement, coal and iron & steel.That surely has let the corporate sector down, as it was expecting thegovernment would maintain the rates in view of a fall in diesel prices of late.It is, therefore, not surprising that the stock markets fell, with the BSESensex closing over 260 points on Thursday compared to the previous day'sclose. The higher freight rates also does nothing to improve the ease of doingbusiness in the country, that the government has been talking much about.
Having said this, the real disappointment is that the minister does not seemto have a convincing plan that will indeed turn the railways around. Settingup new railway stations or modernising the existing ones through privatepublic partnership is a good model, but it remains to be seen how manyprivate parties will come forward for this, given the precarious condition ofthe railways, much emphasised by the minister himself. Privatisation hasbeen ruled out, so Prabhu will stick to raising funds from multilateral
12/29/2015 Rail Budget 2015: Right intent, way forward still unclear
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WriterMG ARUN @mgarun1
The writer is Deputy Editor, India Today.
lenders, infrastructure and pension funds, and from monetising railwayassets. How he manages to raise the required the resources will be key toModi's dream of "transforming" the railways in the next five years.
#Budget Session, #Suresh Prabhu, #Rail Budget 2015,
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