Manivel's Blog

Railway Budget 2010: Not a long term vision

Selected as one of the best internship article by “The Viewspaper

The Railway Budget 2010 by Mamta Banerjee on 24 Feb ’10 has just two words in it, concessions and PPP (Public-Private-Partnership). While concessions were taking the most of the space, the introduction of PPP route in few of the developments show a healthy future for the Indian Railways.

What does it say?

The Railway Budget 2010 was expected with a hike in fares and freight charges due to the rising inflation. Surprisingly, there were no hikes on passenger fares while the freight charges for food grains, kerosene and fertilizers were reduced by Rs.100/- per wagon. The maximum limit of service charges for e-booking of tickets have been slashed by around 50% on sleeper and 3rd AC. There are concessions of 50% – 100% for different sects of people from journalists to cancer patients. There are few not-so-interesting and very abstract plans like to setup a special task force to clear investment proposals within 100 days. Others are on laying new lines, expanding gauges, new trains, new stations and very few PPP plans like multi-level parking, new rail axle factory. And plans that would never workout (at least in the near future) like punctuality of trains and automatic fire and smoke detection system.

The plan outlay is the highest ever at Rs.41,426 crore with a provision of Rs.4,411 crore for new lines, Rs.1,302 crore for passenger amenities and Rs.1,001 crore for metro projects. India Inc. is quite content with the budget and terms it as industry-and-people-friendly budget.

Growth & Profits

For the year 2009-10, the projected profit of Indian Railways was Rs.2,642.26 crore but the estimate was revised to Rs.951 crore (down to 36% of the estimate), which is again 93% down from 2007-08 level. Note that the railway minister during 2007-08 was Lalu Prasad Yadav and in 2009 the ministry was shifted to the hands of Mamta Banerjee. I am not sure if this has anything to do with the slew in profit.

Lacking long term vision

The budget surely lacks a long term vision in improving the overall functioning of the system. There are a lot of issues that Indian Railways has to address to be a world class railway system. Maintenance is the foremost concern for all those who travel through train. With the world nations moving on to faster bullet trains, Indian Railways, being one of the best networked system in the world, does not deserve to be left back. The PPP route proposed by Mamta looks like a good head start but that is not just enough. The Railways should look forward to PPP in every single development of it to be able to use the latest methods of the industries. What we might need right now is “Beeching Axe” that British Railways attempted during 1960s to optimize the system and mordernization, more than just concessions.

The Budget agenda

Here I have comprised a few noteworthy budget moments and a possible outcome/implication based on my knowledge and understanding

Agenda Outcome/Implication
  • No increase in passenger fares and freight charges
  • Reducing the tariff by Rs.100/- per wagon for food grains, kerosene and fertilizers transportation
  • About 50% reduction in service charge on e-booking
  • Concessions for cancer patients, students of madrassas, journalists and their spouses/companions, technicians of the regional film industry
Life saver for aam admi in this time of high inflation. The worry is, will the Railways be able to manage the losses
101 new suburban services in Mumbai and more services in Kolkata & Chennai and more Duronto express and other new lines connecting backward areas Rather than more trains, what we now need is to standardize and optimize the routes and schedules, going back to the drawing board
Safety and security proposals: automatic fire and smoke detectors, manning 13,000 unmanned level crossings and increasing the number of women RPF They do not add much value to the safety & security improvements
Projects under PPP: Preliminary engineering-cum-traffic survey for freight corridors, six high-speed passenger train corridor, multi-level parking, setting up of clean drinking water bottling plants and setting up of new Rail Axle factory A good initiative in ensuring a better development. I wish to see more PPP plans rolling out
Private operators will be permitted to invest in infrastructure and run special freight trains Encouraging private investment is sure to benefit the Railways in long term

On the whole, the budget suffices short term needs but lacks long term goals.

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This entry was posted on February 26, 2010 by in Indian Politics.

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